Upcoming IPO: Schloss Bangalore, Operator Of Leela Palace, Submits Draft Papers For Maiden Issue, Check Details

The firm in its draft red herring prospectus (DRHP) revealed that it plans to raise Rs 3,000 crore via a fresh issue of equity and Rs 2,000 crore through an offer-for-sale (OFS) component

Schloss Bangalore submitted the draft papers for its maiden offering with the Securities and Exchange Board of India (SEBI) on Friday. The company, that operates hotels, resorts, and palaces under The Leela brand, filed its preliminary papers for its initial public offering (IPO) with the capital markets regulator to raise Rs 5,000 crore via the issue.

The firm in its draft red herring prospectus (DRHP) revealed that it plans to raise Rs 3,000 crore via a fresh issue of equity and Rs 2,000 crore through an offer-for-sale (OFS) component. The shareholder behind the OFS is promoter Project Ballet Bangalore Holdings (DIFC), reported Moneycontrol.

The company, that operates in the luxury hospitality sector, could also consider a pre-IPO placement of preferential offer worth Rs 6,000 crore before launching the maiden issue for public subscription.

Schloss Bangalore plans to utilise Rs 2,700 crore from the funds raised from the issue towards repayment of debt for itself and its subsidiaries. As of May 2024, the consolidated debt on the company’s books touched Rs 4,052.5 crore. 

The firm competes with EIH, Juniper Hotels, Chalet Hotels, and Indian Hotels, and is institutionally owned. It plans to set aside the remaining proceeds from the issue towards general corporate purposes. The funds raised from the OFS will go to the promoter.

The Leela brand was established by late Captain C P Krishnan Nair in 1986. The firm’s portfolio includes five hotels completely owned, six managed via hotel management agreements, and one hotel owned and operated by a third party under franchise agreement. 

During the 2023-24 fiscal year, the firm reported a net loss of Rs 2.1 crore, compared to a loss of Rs 61.7 crore clocked in the preceding 2022-23 fiscal year (FY23). While this shows an improvement in the financial performance, the loss recorded in the first two months of the current fiscal year touched Rs 36.4 crore, much higher than the loss logged in the whole previous fiscal year.