Brookfield-backed Leela hotels owner Schloss files for $599 mn India IPO

Hospitality deal: Schloss Bangalore, owner of Indian luxury hotel chain 'The Leela', has filed for a Rs 50 billion ($599 million) IPO on Friday, aiming to cash in on the country's red-hot stock market.

Schloss is the latest in a string of Indian companies rushing to go public in a stock market that is cruising at record highs and is trailing only Wall Street's Nasdaq and S&P 500 as the top-performing indexes this year.

As of mid-September, about 235 companies have gone public in the country and raised more than $8.6 billion, which exceeds the total amount raised last year, LSEG data showed.

Schloss is issuing fresh shares worth 30 billion rupees, while shareholder Project Ballet Bangalore Holdings (DIFC), an affiliate of Brookfield Asset Management BAM.TO, is selling shares worth 20 billion rupees.

The company, which operates 12 luxury hotels across India and is planning to add eight more through 2028, said it will use proceeds from the fresh issue to repay debt.

Sustained travel demand and successful listings of hotel firms, such as Samhi Hotels and Juniper Hotels have inspired investor confidence in the sector.

"The rebound in tourism after the pandemic, especially corporate travel, and an exuberant primary market gives hotel firms an excellent opportunity to take their businesses public," Kranthi Bathini of WealthMills Securities said.

Schloss' consolidated annual losses narrowed to 21.3 million rupees in fiscal-ended March 2024 from 616.8 million rupees, a year ago. Revenue per available room (RevPAR), a key metric for hotel owners and operators, rose nearly 23 per cent on-year to 9,592 rupees in the fiscal-ended March 2024.

India's hospitality market is estimated to grow to $31 billion by 2029, from $24.6 billion in 2024. Morgan Stanley, BofA Securities, JPMorgan and Citi are among the issue's book running lead managers.