Leela Hotels listed on BSE & NSE at ₹406 price at 6% discount on NSE

The renowned luxury hospitality brand, Leela Hotels (Schloss Bangalore Limited), has successfully made its debut on both BSE and NSE platforms. After closing its IPO bidding between May 26-28, 2025, the company made its stock market debut on June 2, 2025 at 6% discount on NSE. This book-building IPO raised ₹3,500 crore, marking a significant milestone for India's luxury hospitality sector as the company aims to strengthen its market position, reduce debt burden, and fund expansion plans.

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Leela Hotels IPO Listing Details

Leela Hotels Limited launched its IPO through a book-building process at ₹435 per share. The minimum investment required was 34 shares costing ₹14,790. The IPO received strong institutional response with an overall subscription of 4.72 times - QIB segment at 7.82 times, NII at 1.08 times, and retail at 0.87 times by the final day of bidding.

Listing Price:  The Leela Hotels IPO share price opened at ₹406 on NSE (down 6.67% from IPO price) and ₹406.50 on BSE (down 6.55% from IPO price) on June 2, 2025, marking a tepid market debut with approximately 6.7% discount to the issue price of ₹435.

Investor Sentiment: Leela Hotels holds a strong position in India's luxury hospitality market through its premium "The Leela" brand portfolio and experienced management backed by Brookfield.

First-Day Trading Performance Outlook

Leela Hotels commenced trading on both BSE and NSE on June 2, 2025, witnessing a tepid stock market debut. The luxury hospitality chain opened at around 6.7% discount to its IPO price, with NSE opening at ₹406 and BSE at ₹406.50. During the market debut, investors and analysts closely monitored the stock's performance considering the luxury hospitality sector's growth potential and the company's financial turnaround story.

Market Sentiment and Analysis

Leela Hotels operates as one of India's largest luxury hospitality companies under "The Leela" brand, established in 2019. The company manages luxury palaces, hotels, and resorts across prime locations including Bengaluru, Chennai, New Delhi, Jaipur, and Udaipur, offering premium accommodations with personalised services inspired by Indian hospitality traditions.

Market Sentiment: Investors actively evaluate the company's luxury positioning, financial recovery, and growth prospects in India's expanding premium hospitality market.

Performance Indicators: Leela Hotels demonstrated strong recovery with revenue growth of 15% and remarkable PAT improvement from losses to ₹47.66 crore profit in FY2025

Listing Outlook: Despite the tepid listing with 6.7% discount, the company's financial turnaround story combined with strong brand recognition and strategic expansion plans position it well for long-term growth in India's expanding luxury hospitality market.

Growth Drivers and Challenges

Leela Hotels presents significant growth potential with its luxury brand portfolio, prime property locations, and strong financial recovery. The rising demand for premium hospitality services and India's growing affluent traveler segment support its expansion plans. However, the company faces challenges including high debt levels, intense competition in luxury hospitality, and the need for continued investment in property upgrades and expansion.

Growth Drivers:

• Premium Brand Portfolio: Operates 12 luxury hotels with 3,382 keys under the prestigious "The Leela" brand
• Strategic Locations: Prime properties in key business and leisure destinations across India
• Financial Turnaround: Strong revenue growth of 15% and shift from losses to ₹47.66 crore profit in FY2025
• Experienced Backing: Promoted by Brookfield, one of the world's largest alternative asset managers
• Comprehensive Offerings: 67 restaurants, bars, cafes, and 12 spas catering to luxury segment
   

Challenges:

• High Debt Burden: Significant borrowings of ₹3,908.75 crore requiring careful debt management
• Intense Competition: Faces pressure from established luxury hotel chains and new market entrants
• Capital Intensive: Requires continuous investment for property maintenance and expansion
• Economic Sensitivity: Luxury hospitality demand susceptible to economic downturns and travel disruptions
• Valuation Concerns: Post-issue P/E of 15.87 may offer limited upside if growth slows down.

Utilisation of IPO Proceeds

Leela Hotels plans to utilise the ₹2,500 crore raised from fresh issue to strengthen its financial position and support business growth.

• Debt Repayment: Approximately ₹2,300 crore will be used to repay or prepay existing borrowings of the company and its subsidiaries, helping reduce interest costs and improve financial flexibility.
• General Corporate Purposes: Remaining funds allocated for general business needs, including operational expenses and strategic growth initiatives.
   

Financial Performance of Leela Hotels

Leela Hotels has shown remarkable financial recovery, driven by strong operational performance and effective cost management:

• Revenue: ₹1,406.56 crore for FY2025, showing 15% growth from ₹1,226.50 crore in FY2024, reflecting strong demand for luxury hospitality services.
• Net Profit: ₹47.66 crore in FY2025, a significant turnaround from a loss of ₹2.13 crore in FY2024, demonstrating improved operational efficiency.
• Net Worth: Improved from negative ₹2,825.72 crore in FY2024 to positive ₹3,604.99 crore in FY2025, reflecting successful restructuring and capital infusion.
   

Leela Hotels offers an intriguing investment opportunity with its premium brand positioning, strong financial recovery, and focus on luxury hospitality excellence. While it faces challenges like high debt levels and competitive pressures, its successful turnaround story and experienced management position it well for capitalising on India's growing luxury travel market. The IPO presents a chance for long-term investors to participate in a recovering luxury hospitality brand with significant growth potential in India's expanding premium segment.