Leela Hotels IPO: Check IPO Date, Lot Size, Price & Details

About the Company

Schloss Bangalore Limited, operating as The Leela Palaces, Hotels and Resorts, is a leading luxury hospitality brand in India, founded in 1986. It manages 13 hotels with 3,553 keys across key business and leisure destinations, including New Delhi, Mumbai, Bengaluru, Chennai, Goa, as of March 31, 2025. The Leela is renowned for blending Indian heritage with modern luxury, catering to high-net-worth individuals, corporate travelers, and MICE clients.

Its portfolio includes five owned hotels, seven managed properties, and one franchised hotel, covering 80% of India’s international air traffic markets. With a Net Promoter Score of 85.11 in FY25, it leads in guest satisfaction. The company plans to expand the Portfolio with seven new hotels, aggregating approximately 678 keys by 2028, targeting new segments like wildlife and heritage tourism. Backed by Brookfield,

The Leela excels in operational metrics, with ARR at ₹22,545 and RevPAR at ₹15,306 in FY25, 1.4 times the luxury segment average. The Leela focuses on operational excellence, sustainability, and brand extensions like residential clubs.

IPO Details:

Objects of the Offer:

The net proceeds of ₹2,500 crore from the fresh issue will be utilized as follows:

Key Strengths and Opportunities

• Iconic Luxury Brand with Pan-India Presence: The Leela is a highly recognized luxury hospitality brand in India, known for its premium properties and exceptional service standards. The company operates a diversified portfolio of 13 hotels across major business and leisure destinations, strengthening its market presence.
• Premium Owned Hotels in High-Entry Barrier Markets: The Leela’s Owned Portfolio includes five iconic hotels (1,224 keys) in prime locations like Bengaluru, New Delhi, and Udaipur, with high barriers to entry due to limited land availability and no significant new luxury supply expected. These hotels, designed as modern palaces, achieve a RevPAR CAGR of 11.8% (FY19-FY24), outpacing the luxury segment’s 8.6%.
• Strong Backing and Financial Support: Backed by Brookfield Asset Management, which manages US$272 billion in real estate assets, The Leela benefits from robust financial resources, global expertise, and development synergies. This support enhances operational resilience, strategic expansion, and governance, positioning the company for sustained growth.
• Strategic Expansion and Asset-Light Growth Model: The Leela is expanding its footprint with plans to add 678 keys by 2028 in key locations like Agra, Srinagar, and Mumbai, focusing on wildlife, spiritual, and heritage tourism. Its mix of owned (5 hotels), managed (7 hotels), and franchised (1 hotel) properties supports scalable, capital-efficient growth while leveraging high-barrier markets.
• Comprehensive Luxury Ecosystem with Diversified Revenue: The Leela’s luxury ecosystem includes 72 F&B outlets, 13 spas, and MICE facilities, catering to diverse guests (56.96% leisure, 25.45% group bookings in FY25). Non-room revenues (e.g., F&B, MICE) contributed 51.7% of total income in FY25, driving a TRevPAR of ₹29,575, 1.4 times the luxury segment average.

 Risk

• High Revenue Concentration from Few Properties: Over 90% of the company’s total income in FY23, FY24, and FY25 came from just five owned hotels. Any operational, regulatory, or demand-side disruption at these locations could materially impact revenue and profitability. This concentration limits diversification benefits and increases exposure to regional or asset-specific risks.
• Heavy Indebtedness and High Finance Costs: As of March 31, 2025, the company had outstanding consolidated borrowings of ₹3,908.75 crore, with finance costs consuming 32.6% of total income in FY25. This debt burden not only strains cash flows but also limits operational flexibility and poses refinancing risks if business conditions deteriorate.
• Historical Losses and Potential for Future Losses: Although profitable in FY25, the company and some of its key subsidiaries reported losses in FY23 and FY24, the historical trend and potential for future losses could erode investor confidence, impact cash flows, and hinder growth initiatives.
• Execution Risk on Expansion Projects and Renovations: The company is currently undertaking major capex and refurbishment across existing hotels and has new properties under construction (e.g., The Leela Ayodhya, Agra, Ranthambore, Srinagar, Bandhavgarh). Delays, cost overruns, or regulatory hurdles in these projects could defer revenue generation and impact return on capital.
• Risk of Brand Reputation Deterioration: The Leela’s brand, ranked among the top globally by Travel + Leisure, is critical to its success. Any deterioration in “The Leela” brand’s quality or reputation due to service lapses, a drop in its NPS of 85.11 in FY25, or negative publicity could significantly harm its business, directly impacting revenue and market position in the luxury sector.

Financial Snapshot:

*Our EBITDA for Fiscal ended March 31, 2025, includes a share of net loss of joint venture accounted for using equity method of ₹ 0.189 Crores.
^ The number of keys and number of hotels is at the end of each of the respective periods and includes a franchise hotel The Leela Mumbai with 394 keys as of March 31, 2024 and March 31, 2023, and 398 keys as of March 31, 2025

Peer Comparison:

Conclusion:

Schloss Bangalore Limited (The Leela Hotels) is a well-known name in India’s luxury hotel space, backed by premium properties and a strong brand reputation. It also benefits from the support of Brookfield, a global asset manager. Operational performance has improved, with high room rates and strong guest satisfaction. However, the financial side raises concerns. The company has a high debt load, and interest costs are eating into profits. Over 90% of its revenue comes from just five hotels, which increases risk if anything goes wrong at those locations. The company also has a history of losses and is spending heavily on new projects, which may take time to deliver returns.

Considering the high debt, concentrated revenue, and execution risks, we recommend to avoid this IPO.