The Leela Hotels Operator Schloss Bangalore IPO — Should You Subscribe? Read Anand Rathi's Analysis

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Anand Rathi Report

The Leela Hotels Operator Schloss Bangalore Ltd. will launch its initial public offering on May 26 and the offer will remain open for subscription till May 28. The luxury hospitality brand has set a price band of Rs 413 to Rs 435 per share.

The Rs 3,500-crore IPO comprises of fresh equity shares worth Rs 2,500 crore and an offer-for-sale component totaling Rs 1,000 crore.

Investors can place bids starting from a minimum of 34 shares and in multiples thereafter.

Objects of the Issue

• Repayment of certain borrowings availed by company and their subsidiaries.

• General corporate purposes.

Valuation

Schloss Bangalore has a leading Luxury Hospitality Brand with Rich Heritage and Global Appeal with marquee Owned Hotels in Markets with High Barriers to Entry and comprehensive Luxury Ecosystem Resulting in Diversified Revenue Sources along with track Record of Driving Operational Efficiency by their Active Asset Management Approach.

At the upper price band company is valuing at P/E of 266.8x, P/S of 11.2x and market cap of Rs 1,45,271 million with EV/Ebitda of 30x post issue of equity shares.

We believe that the IPO is fairly priced and recommend a “Subscribe-Long term” rating to the IPO.

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