Leela Palaces, Hotels, and Resorts is gearing up for a historic IPO. The luxury hotel chain has submitted draft papers to SEBI for an initial public offering (IPO) worth ₹5000 crores. Once approved, this will mark the largest IPO in the Indian hotel industry. The funds raised are expected to be used for debt repayment and general corporate purposes, signaling a significant step in the company’s expansion and financial strategy.
Leela’s IPO: Key Details
The IPO will comprise fresh shares worth ₹3000 crores and an offer for sale (OFS) of ₹2000 crore. The OFS will allow Leela’s promoters, particularly Project Bale Bangalore Holdings (DIFC), to reduce their stake. Additionally, the company may secure ₹600 crores in pre-IPO funding before the official filing with the Registrar of Companies.
The money raised from the fresh issue will primarily be used to reduce the company’s debt load. As of May 2024, Leela Palaces reported a consolidated debt of ₹4052.5 crore. Out of the ₹3000 crore, ₹2700 crore will go towards debt repayment, while the remaining funds will be allocated for general corporate purposes.
A Growing Presence Across India
Leela Palaces, originally founded by CP Krishnan Nair in 1986, now operates under the Brookfield Asset Management umbrella. The brand is known for its luxurious hotels and resorts located in some of India’s most iconic destinations. Currently, the Leela chain includes properties in 12 cities across India, including New Delhi, Bangalore, Mumbai, Chennai, Udaipur, and Jaipur.
Out of the 12 hotels under the Leela brand, five are company-owned, six are managed under hotel management agreements, and one is franchised.
Financial Turnaround
Leela Palaces has shown a significant improvement in its financial performance in recent years. For the fiscal year 2024, the company reported a net loss of just ₹2.1 crore, a sharp improvement from losses of ₹61.7 crore in FY 2023 and ₹319.8 crore in FY 2022. However, losses during April and May of FY 2025 have already reached ₹36.4 crore.
In terms of revenue, Leela Palaces saw impressive growth. Its revenue increased by 36.2%, reaching ₹1171.5 crore in FY 2024, compared to ₹860 crores in FY 2023.
Managed by Top Investment Banks
A consortium of 11 leading investment banks, including Kotak Mahindra Capital, JM Financial, and Morgan Stanley, will oversee the share sale. KFin Technologies has been appointed as the registrar for the issue, ensuring smooth handling of investor transactions.
Leela Palaces’ IPO has the potential to reshape the Indian hospitality sector and cement its position as one of the country’s top luxury hotel chains.
