Leela Hotels owner Schloss Bangalore IPO subscribed 6% on Day 1; GMP turns flat

The initial public offering (IPO) of luxury hotels and resorts brand 'The Leela' owner Schloss Bangalore Ltd was off to a slow start on the first day of bidding, subscribing merely 6 per cent and that too on retailers' push. The public issue opened on Monday and will conclude for bidding on Wednesday (May 28, 2025).

The retail individual investor portion was subscribed by 20 per cent on Day 1. The qualified institutional buyer (QIB) and non-institutional investor (NII) categories saw 3 per cent subscriptions, respectively. The IPO attracted bids for a total of 28,75,176 shares against the 4,66,10,169 equity shares on offer.

The company aims to raise Rs 3,500 crore from the public offering. Ahead of the initial share sale, Schloss Bangalore had raised Rs 1,575 crore from anchor investors.

The public issue of Leela Hotels is available at a price band of Rs 413-435 per share and a lot size of 34 shares. Investors can bid for a minimum of 34 shares of Leela Hotels IPO and in multiples thereof.

A retail investor would require a minimum of Rs 14,790 to bid for one lot of the IPO, and a maximum of 13 lots or 442 shares, amounting to Rs 1,92,270.

The Brookfield-backed Schloss IPO is a book-built issue, which comprises a fresh issue of 5.75 crore equity shares and an offer for sale (OFS) with promoter Project Ballet Bangalore Holdings offloading 2.3 crore equity shares.

"The company has proposed a Rs 3,500 crore IPO, comprising a Rs 2,500 crore fresh issue and a Rs 1,000 crore OFS. The proceeds from the fresh issue will primarily be used to repay approximately Rs 2,300 crore of outstanding debt. This planned deleveraging is expected to significantly reduce interest expenses, effectively making the company nearly debt-free, thereby improving profitability and strengthening overall cash flows," said Mehta Equities.

"Given the company's strategic asset base, premium brand positioning and backing by a global institutional investor, we view Schloss Bangalore as a compelling long-term play on India's rising luxury and tourism sector," the brokerage also said, adding that it recommends investors to 'Subscribe' the issue with a long-term perspective.

It has reserved 75 per cent of the net offer for qualified institutional buyers, 10 per cent for retail investors and 15 per cent for non-institutional investors.

The grey market premium (GMP) of Schloss Bangalore saw a correction, given the muted bidding response for the issue. The company was last seen commanding a premium of Rs 14 per share in the unlisted market, suggesting around 3 per cent listing gains for investors. The GMP was at Rs 20 before the issue kicked off.