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Schloss Bangalore Ltd, owner of Leela Palaces Hotels and Resorts, debuts weakly on the stock market, listing at Rs 406 on NSE, which is 6.67% below IPO price.
Leela Hotels IPO Listing.
Leela Hotels IPO Listing: Schloss Bangalore Ltd, the owner of Leela Palaces Hotels and Resorts, on Monday made a weak stock market debut. On the NSE, shares of the company was listed at Rs 406 apiece, which was 6.67 per cent lower than the IPO price. Later, it declined 7 per cent to Rs 404.45.
However, the shares recovered sharply and entered green territory to hit the day’s high of Rs 436 apiece, at around 11 am.
On the BSE, the stock was listed at a discount of 6.55 per cent at Rs 406.5 apiece.
The IPO price was fixed at Rs 435 per share.
The company’s market valuation stood at Rs 13,642.18 crore.
The Leela Hotels IPO, which was open for public subscription between March 26 and March 28, received a 4.72 times subscription, with a bidding of 20,87,17,330 shares against the offered shares of 4,42,52,875. The retail quota was not fully subscribed and received just 0.87 times subscription, while NII participation also remained low at 1.08 times. Its qualified institutional buyer (QIB) category got a 7.82 times subscription.
Its grey market premiums (GMP), which indicate listing gain/ loss, already indicated a negative listing.
Should You Hold, Buy or Sell?
Satish Chandra Aluri of Lemonn Markets Desk said, “Leela Hotels listed at a 6.6% discount, reflecting subdued investor sentiment despite strong institutional interest. Retail and non-institutional participation remained weak, with the retail portion under-subscribed and non-institutional bids only marginally above the threshold.”
A flat grey market premium ahead of the listing had already signaled muted near-term expectations. “Elevated valuations continue to be a concern, weighing on investor confidence,” he added.
Most brokerage had mentioned that the IPO be subscribed only with caution and it is for high-risk, long-term investors.
Bajaj Broking recommended the IPO for long-term view.
Canara Bank Securities flagged the high P/E of 220.8x (vs peer average of 98.9x) but noted improved operating leverage and a reasonable P/B of 2.92x, issuing a “Subscribe with Caution” for high-risk, long-term investors.
BP Equities also cited valuation concerns but highlighted the company’s growth prospects, sector outlook, and debt reduction plans, recommending a “Subscribe” for medium to long-term investors.
Schloss Bangalore, which is backed by Brookfield Asset Management, plans to use the proceeds of the fresh issue to pay loans availed by the company and its subsidiaries and for general corporate purposes.
Schloss Bangalore, known for its luxurious hotels and resorts under “The Leela” brand, had a portfolio of 3,382 keys across 12 operational hotels as of May 31, 2024. Its portfolio includes The Leela Palaces, The Leela Hotels, and The Leela Resorts, located across 10 destinations in the country.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously asso…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously asso… Read More
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