Leela Hotels (Schloss Bangalore Limited) – IPO Review 2025, Analysis and Notes

Recommendation: Neutral

Key Highlights

Company Background: Schloss Bangalore Limited operates and manages premium luxury hotels and resorts under “The Leela” brand, making it one of India’s foremost luxury hospitality chains. The company manages a portfolio of 3,553 rooms across 13 hotels, comprising The Leela Palaces, The Leela Hotels, and The Leela Resorts. The group follows an asset-light model, with five properties owned and managed, seven managed, and one franchised. As of December 2024, Schloss has a presence in all seven top business hubs and three of the five leading leisure destinations, representing approximately 18% of the total luxury hotel rooms in those markets.

Market Opportunity: India’s luxury hospitality sector is witnessing robust growth on the back of increased domestic and international travel. Schloss, through The Leela brand, stands to benefit from this momentum due to its strong presence in high-demand business and leisure geographies. The asset-light expansion strategy facilitates wider brand presence with reduced capital outlay, supporting scalable and sustainable growth in the evolving hospitality space.

Distinctive Brand, Prime Assets, and Diversified Revenue Base: The Leela brand holds significant global and domestic recognition, attracting discerning customers. The company owns landmark hotels in high-barrier-to-entry markets, which enhances its exclusivity and premium appeal. With a rich portfolio spanning palaces, resorts, and urban hotels, Schloss earns revenue from multiple verticals including accommodation, dining, events, and wellness, reducing dependency on any single segment.

Operational Excellence and Strategic Backing: Schloss has demonstrated strong operational efficiency through active asset management practices, ensuring optimal performance across properties. The company is led by an experienced senior leadership team and a highly knowledgeable board. Further, the company enjoys backing from Brookfield, a renowned global investor with a deep understanding of Indian markets. This strong sponsorship brings credibility, financial stability, and strategic guidance, enabling Schloss to pursue long-term growth.

Financials: The company’s revenue has grown at a CAGR of 23%, from ₹860 crore in FY23 to ₹1,301 crore in FY25. During the same period, EBITDA has grown at 25% CAGR, indicating healthy margins and operational improvements. The company turned profitable in FY25, reflecting a favorable demand environment and efficient cost management.

Valuation: At the upper price band, the company is valued at 26.3x its FY25 EV/EBITDA, which lies in the higher range of the industry benchmark. Considering the cyclical nature of the hospitality sector and the elevated valuation, the outlook remains Neutral.

Key Risks:

• Asset-Linked Risks: Certain properties are mortgaged, and failure to meet obligations could lead to asset forfeiture.

• Operational Disruptions: Delays in property upgrades or refurbishments may affect service quality and revenue.

• Expansion-Related Risks: Difficulty in identifying or acquiring strategic assets could hamper growth.

• Brand Risk: Any decline in The Leela brand’s perception could adversely impact revenue and profitability.

Issue Highlights

Offer Structure

Lead Book Running Managers

• JM Financial Limited

• BOFA Securities India Limited

• Morgan Stanley India Company Pvt Ltd

• J.P. Morgan India Private Limited

• Kotak Mahindra Capital Company Limited

• Axis Capital Limited

• Citigroup Global Markets India Private Limited

• IIFL Securities Ltd

• Motilal Oswal Investment Advisors Limited

• SBI Capital Markets Limited

Registrar to the Offer

Kfin Technologies Limited

Research Analyst

Rajan Gupta
📧 rajan.gupta1@religare.com

Research Team

• Ajit Mishra – ajit.mishra@religare.com

• Abhijeet Banerjee – abhijeet.banerjee@religare.com

• Gaurav Sharma – gauravsharma2@religare.com

• Ashwani Harit – ashwani.harit@religare.com

• Divya Parmar – divya.parmar@religare.com

• Vinay Kalani – vinay.kalani1@religare.com

• Rajan Gupta – rajan.gupta1@religare.com

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• Author: Religare Broking
• Last Updated: June 12, 2025