Disappointing Debut for Schloss Bangalore Despite Strong Demand in IPO

Schloss Bangalore, the parent entity of the hotel chain under ‘The Leela Hotels’ brand made a disappointing debut on the bourses on June 2 as the stock got listed at a near 7% discount to the IPO price of Rs 435. The stock later rose as much as 7% over the listing price to its intraday high of Rs 436.

At 11:20 am, shares of the company traded at Rs 433.60 on the National Stock Exchange, up nearly 7% over the listing price.

The IPO of Schloss Bangalore was subscribed 4.50 times. The issue opened for bidding on Monday, May 26 and closed on Wednesday, May 28. The price band of the IPO was pegged at Rs 413-435 per share. The IPO consisted of a fresh issue of Rs 2,500 crore worth of shares and an offer-for-sale of shares worth up to Rs 1,000 crore.

Out of the total proceeds, Rs 2,300 crore will be used to repay or prepay some of the borrowings availed of by the company and its subsidiaries, according to the information available in the red herring prospectus.

As of March, The Leela Hotels had 3,553 keys across 13 operational hotels. Five of the said 13 hotels are directly owned, while one is owned and operated by a third-party, the company had said. The remaining seven hotels are under its managed portfolio. The company has its presence in all seven top business markets and three of the top five leisure markets of India.

The Leela Hotels accounted for almost 18% of the total luxury keys across these markets as of December 2024, the company cited HVS Report. It also remains a frontrunner in customer experience metric in FY24 with a net promoter score of 84.

As of 11:20 am, the stock had a market capitalisation of Rs 14,473.73 crore, and 8.79mn shares have changed hands on the NSE.