The luxury hospitality name owning some of India’s finest hotel experiences, Leela Hotels, is stepping into the capital markets with its upcoming IPO. With its Rs 3,500 crore, the company will open for subscription on May 26.
Ahead of its official opening, let’s take a look at the six key things you should know before subscribing.
Leela Hotels IPO: IPO timeline and structure
The three day bidding process of the Leela Hotels IPO will open on May 26, and will conclude on May 28.
The total size of the issue is Rs 3,500 crore. Furthermore, it is divided into two parts which include a fresh issue of 5.75 crore shares worth Rs 2,500 crore and an offer for sale (OFS) of 2.30 crore shares valued at Rs 1,000 crore.
After the bidding process, the shares are expected to be listed on both the Indian bourses, BSE and NSE, with a tentative listing date of June 2. The allotment of shares is likely to be finalised by May 29.
Leela Hotels IPO: Price band and investment requirements
The price band for the IPO is fixed at Rs 413 to Rs 435 per share. For retail investors, the minimum application size is 34 shares, amounting to Rs 14,042 at the lower end.
For non-institutional investors, the entry barrier is higher. Small non-institutional investors (sNII) need to apply for at least 14 lots, or 476 shares, requiring an investment of around Rs 2,07,060. Big non-institutional investors (bNII) must apply for at least 68 lots, or 2,312 shares, which translates to Rs 10,05,720.
Leela Hotels IPO: Grey market buzz
Before the IPO opens, Leela Hotels shares are trading at a premium of Rs 17. This implies a potential listing price of Rs 452, which is 3.91% higher than the upper end of the price band.
However, it is important to note that it is not the actual listing price and may fluctuate based on market sentiment.
Leela Hotels IPO: Risk factors
The company’s draft prospectus outlines several risks that investors should carefully consider. These include:
“Any deterioration in the quality or reputation of our brand could have an adverse effect on our business, financial condition and results of operations.”
“We have incurred losses (Rs 21.27 million for the Financial Year 2024, Rs 616.79 million for the Financial Year 2023 and Rs 3,198.29 million for the Financial Year 2022) in the past and may continue to experience losses in the future which could result in an adverse effect on our business, cash flows and financial condition.”
“We have had negative net cash flows in the past and may continue to have negative cash flows in the future, which could adversely affect our results of operations and financial condition.”
Leela Hotels IPO: Who is leading the IPO
The IPO is being managed by a heavyweight line-up of merchant bankers. This includes JM Financial, BofA Securities, Morgan Stanley, J.P. Morgan, Kotak Mahindra Capital, Axis Capital, Citigroup, IIFL Securities, Motilal Oswal Investment Advisors, and SBI Capital Markets. KFin Technologies will act as the registrar for the issue.
Leela Hotels IPO: Company profile and use of proceeds
The IPO is being launched by Schloss Bangalore, which owns and manages luxury hotels under the “Leela” brand. Founded in March 2019, the company has established a footprint in the premium hospitality segment.
The net proceeds from the fresh issue will be used primarily to repay or prepay certain borrowings, both for the parent company and its subsidiaries Schloss Chanakya, Schloss Chennai, Schloss Udaipur, and TPRPL. A portion will also be set aside for general corporate purposes.