The Leela Hotels IPO, officially known as Schloss Bangalore, is set to list on the Indian stock exchanges (BSE and NSE) today, June 2, 2025. The ₹3,500 crore IPO, which opened for subscription from May 26 to May 28, saw a subscription of 4.50 times. While the overall subscription was healthy, driven primarily by Qualified Institutional Buyers (QIBs) who subscribed 7.46 times their quota, the response from Retail Individual Investors (RIIs) and Non-Institutional Investors (NIIs) remained subdued, with subscription rates of 83% and 1.02 times, respectively.
Ahead of the listing, grey market premium (GMP) trends indicate a muted debut for the luxury hotel chain. As of June 1, 2025, the GMP for Leela Hotels IPO was around ₹2 to ₹3 per share. This suggests a listing price of approximately ₹437 to ₹438, a marginal premium over the IPO price of ₹435. InvestorGain.com had earlier indicated a similar trend, with a GMP of ₹3, estimating a listing price of ₹438, which is only 0.69% higher than the IPO price.
Analysts attribute the cautious sentiment to a combination of factors, including high valuations and uncertain market conditions. Gaurav Garg from Lemonn Markets Desk noted that the flat GMP throughout the IPO period reflected a lack of strong listing expectations among market participants. Despite the muted listing projections, some analysts suggest that investors with a mid-to-long-term investment horizon should consider holding the stock.
During the IPO, Rajan Shinde, a Research Analyst at Mehta Equities, expressed a positive outlook on Schloss Bangalore, highlighting the company's strategically located portfolio of luxury properties, its ability to command premium pricing, and its well-diversified revenue base. Shinde also pointed out that a significant portion of the company's revenue comes from direct bookings and international guests, underscoring its global appeal. Mehta Equities anticipates a flat listing for Schloss Bangalore, advising allotted investors to hold the stock for the long term and suggesting that new investors wait for a post-listing correction before considering an investment.
The IPO comprised a fresh issue of 5.75 crore shares, amounting to ₹2,500 crore, and an offer for sale (OFS) of 2.30 crore shares, aggregating to ₹1,000 crore. The company intends to utilize the net proceeds from the fresh issue for general corporate purposes and to repay outstanding borrowings.
Leela Hotels operates luxury properties under "The Leela" brand, with a portfolio that includes The Leela Palaces, The Leela Hotels, and The Leela Resorts. As of May 31, 2024, the company managed 3,382 rooms across 12 hotels in 10 cities throughout India. The company also plans to expand its portfolio by adding eight new properties with approximately 833 keys by 2028.
