Leela Palaces, Hotels & Resorts to allocate Rs 2,300 cr towards debt repayment; aims to go debt-free post-IPO

Leela Palaces, Hotels and Resorts — the luxury hospitality brand operated by Brookfield Asset Management-backed Schloss Bangalore — plans to raise Rs 3,500 crore through its upcoming initial public offering (IPO) and will allocate Rs 2,300 crore from the net proceeds towards debt repayment. The remaining funds will be used for general corporate purposes. Post-IPO, the company aims to become debt-free.

This will be the largest IPO in India’s hospitality sector. The issue will open on May 26 and close on May 28, with a price band set at Rs 413 to Rs 435 per share. Investors can place bids starting from a minimum of 34 shares and in multiples thereafter.

“The primary proceeds of the IPO, which is ₹2,300 crore, would be used to squarely pay off our debt, and we will become net zero when it comes to net debt,” said Anuraag Bhatnagar, Chief Executive Officer of Schloss Bangalore.

The Brookfield-backed company has revised the IPO size down by 30%, from the originally planned ₹5,000 crore to ₹3,500 crore. The IPO consists of a fresh issue of equity shares worth ₹2,500 crore and an offer-for-sale (OFS) of shares worth ₹1,000 crore by promoter Project Ballet Bangalore Holdings (DIFC), a Brookfield subsidiary.

Up to 75% of the total issue is reserved for qualified institutional buyers (QIBs), of which 60% — amounting to ₹1,575 crore — is earmarked for anchor investors. Additionally, 15% is allocated to non-institutional investors and 10% to retail investors.

Schloss Bangalore currently operates 3,553 keys across 12 hotels, comprising 13 operational hotels in 10 cities, five owned hotels, 7 managed under hotel management agreements, and one franchised property. The company also plans to diversify into emerging travel themes such as wildlife, spiritual, and heritage tourism.

Several leading investment banks are serving as book-running lead managers for the IPO, including JM Financial, BofA Securities India, Morgan Stanley India, J.P. Morgan India, Kotak Mahindra Capital, Axis Capital, Citigroup Global Markets India, IIFL Securities, Motilal Oswal Investment Advisors, ICICI Bank, and SBI Capital Markets. KFin Technologies is the registrar to the issue.

Post-listing, Leela Hotels' market capitalization is expected to be approximately ₹10,155.36 crore.