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Schloss Bangalore, which operates palaces, hotels and resorts under The Leela brand, has filed preliminary papers with the capital markets regulator Sebi on September 20 to raise Rs 5,000 crore through initial public offering.
The company aims to raise Rs 3,000 crore via fresh issue, and Rs 2,000 crore through offer-for-sale route, according to the draft red herring prospectus.
Promoter Project Ballet Bangalore Holdings (DIFC) is the selling shareholder in the offer-for-sale.
The luxury hospitality chain may consider a pre-IPO placement of preferential offer of Rs 600 crore, before the filing of the Red Herring Prospectus with the ROC or before launching the public issue for subscription.
The institutionally-owned Schloss Bangalore, which competes with listed peers such as Indian Hotels, EIH, Chalet Hotels, and Juniper Hotels, will allocate Rs 2,700 crore from the net fresh issue proceeds towards repaying debt, both for itself and its subsidiaries. The consolidated debt on its books stood at Rs 4,052.5 crore as of May 2024. The remaining IPO funds will be used for general corporate purposes, while the offer-for-sale proceeds will go to the promoter.
Schloss owns and operates luxury hotels and resorts under the Leela brand, with 3,382 keys across 12 operational hotels. In 1986, the late Captain C.P. Krishnan Nair laid the foundation of the Leela brand. The portfolio includes five owned hotels, six hotels managed through hotel management agreements, and one hotel owned and operated by a third-party under a franchise arrangement.
Total 11 merchant bankers - JM Financial, BofA Securities India, Morgan Stanley India Company, JP Morgan India, Kotak Mahindra Capital Company, Axis Capital, Citigroup Global Markets India, IIFL Securities, ICICI Securities, Motilal Oswal Investment Advisors, and SBI Capital Markets will manage the public issue. KFin Technologies is the registrar to the issue.
