Leela Owner to Invest Rs 1,131 Crore in Five New Luxury Properties
The company currently operates 13 hotels under 'The Leela' brand, with five being company-owned and eight under management.
Brookfield-backed Schloss Bangalore Ltd, owner of The Leela Palaces, Hotels and Resorts, is set to invest Rs 1,131 crore to develop five new company-owned hospitality properties across India.
These properties, comprising 475 rooms, will be located in Agra, Srinagar, Bandhavgarh, Ranthambore, and Ayodhya, and are expected to commence operations by 2028. The announcement comes as Schloss Bangalore launches its Rs 3,500-crore initial public offer on Monday.
The company currently operates 13 hotels under "The Leela" brand, with five being company-owned and eight under management. Ravi Shankar, Head Asset Management and Chief Financial Officer at The Leela Palaces, Hotels and Resorts, told PTI, "We are investing Rs 1,131 crore into the five upcoming owned hotels in Agra, Srinagar, Bandhavgarh, Ranthambore and Ayodhya having 475 keys overall."
Following the IPO, which includes a fresh issue of equity shares worth Rs 2,500 crore, the company aims to be debt-free, using the primary proceeds to pay off its current borrowings of over Rs 3,900 crore as of March 2025.
Canada-based investment management firm Brookfield, which acquired "The Leela" brand in 2019, proposes to dilute its stake by 24% post the Rs 3,500-crore IPO, bringing its ownership down to 76%. Ankur Gupta, Head of Asia Pacific and Middle East for Brookfield"s Real Estate Group, stated, "At the upper end of the price, our ownership will be roughly 76% post-IPO, so 24% dilution, including offer for sale at the price when I bought it."
Shankar added, "We have 20 hotels, out of which 13 are operational. We own five hotels, which is 35% of our total portfolio. We have 678 keys in active stages of development at various stages. Nearly 65% of our portfolio is through our managed hotels."
The Rs 3,500-crore IPO opens on Monday at a price band of Rs 413-435 per share, and is a combination of a fresh issue and an offer for sale of stocks valued at Rs 1,000 crore by promoter Project Ballet Bangalore Holdings Ltd.
As of May 31, 2024, Schloss Bangalore, which operates luxury hotels and resorts under "The Leela" brand, had a portfolio of 3,382 keys across 12 operational hotels in 10 key Indian destinations. The company has demonstrated significant financial growth, with operating profit, or Ebitda, increasing from Rs 87.72 crore in financial year 2022 to Rs 600.03 crore in financial year 2024.
(With inputs from PTI)
