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Schloss Bangalore Ltd, the Brookfield-backed operator of luxury brand The Leela Palaces, Hotels and Resorts, has announced an investment of INR 1,131 crore to develop five company-owned hospitality properties across Agra, Srinagar, Bandhavgarh, Ranthambore, and Ayodhya. These developments, totalling 475 rooms, are slated to commence operations by 2028. The announcement came just before the company's INR 3,500 crore IPO opened earlier this week, aiming to raise INR 2,500 crore for debt repayment. Brookfield, which acquired The Leela brand in 2019, is set to dilute its holding by 24%, marking one of the largest public issues in India's hospitality sector.
Brookfield-backed Schloss Bangalore Ltd, the owner of the luxury hospitality chain The Leela Palaces, Hotels and Resorts, has committed an investment of INR 1,131 crore towards the development of five new company-owned properties. These premium establishments-located in Agra, Srinagar, Bandhavgarh, Ranthambore, and Ayodhya-will collectively add 475 rooms to the group's portfolio and are anticipated to become operational by 2028, according to the company's red herring prospectus. Advertisement
The development was revealed just ahead of Schloss Bangalore's Initial Public Offering (IPO) worth INR 3,500 crore, which opened earlier this week. The company currently operates 13 hotels-five owned and eight under management-under the prestigious 'Leela' brand.
Ravi Shankar, Head of Asset Management and Chief Financial Officer at The Leela Palaces, Hotels and Resorts, mentioned that the company is channeling INR 1,131 crore into these five properties. He also shared that the IPO proceeds, particularly the INR 2,500 crore raised through the fresh equity issue, would be primarily utilised to settle outstanding debts, thereby rendering the company debt-free.
The IPO comprises a fresh issue of shares worth INR 2,500 crore and an offer-for-sale (OFS) segment of INR 1,000 crore by Project Ballet Bangalore Holdings (DIFC) Pvt Ltd. The IPO has been priced in the range of INR 413-435 per share.
New York-based investment giant Brookfield had acquired The Leela brand in 2019 and is expected to dilute its ownership by 24% post-IPO, retaining a 76% stake. Ankur Gupta, Head of Asia Pacific and Middle East for Brookfield's Real Estate Group, indicated that this reduction includes shares from the OFS at the price they had initially paid.
At present, Schloss Bangalore has 20 hotels in its portfolio, 13 of which are operational. Of these, five are directly owned by the company, representing 35% of the total portfolio. The remaining 65% are managed properties. Additionally, 678 keys are under active development at various stages.
As of late May 2024, the firm had a portfolio of 3,382 keys spread across 12 operational hotels located in ten key Indian destinations, including The Leela Palaces, The Leela Hotels, and The Leela Resorts.
Financially, Schloss Bangalore has demonstrated robust growth, with its EBITDA rising from INR 87.72 crore in FY22 to INR 600.03 crore in FY24. However, as of March 2025, the company had total borrowings exceeding INR 3,900 crore.
The IPO, positioned as a landmark in the sector, not only aims to bolster the company's balance sheet but also allows Brookfield to partially exit its investment. With an expanding portfolio and a clear focus on deleveraging, the group is steering towards sustainable growth while reinforcing its premium positioning in India's hospitality landscape.
Source - PTI
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