As per market data, Leela Hotels IPO is currently commanding a GMP of just Rs 2 over the issue price of Rs 435. This pegs the expected listing price at Rs 437 — translating to a modest 0.46% gain on debut. The muted sentiment reflects caution from investors despite the company’s strong brand presence and improving financial metrics.
The IPO comprised a fresh issue of Rs 2,500 crore and an offer for sale worth Rs 1,000 crore. The issue was subscribed 2.62 times overall, led by Qualified Institutional Buyers (QIBs), who bid 4.34 times their allotted quota. In contrast, retail investors subscribed only 70% of their portion, while the high-net-worth individual (HNI) category covered just 32%.
The company, backed by funds managed by Brookfield, owns five luxury hotels in prime locations including Bengaluru, Chennai, New Delhi, Jaipur, and Udaipur. In addition to these wholly owned assets, it operates several other Leela-branded properties through management contracts. With a total portfolio of 12 operational hotels and 3,382 keys, the company is among the largest luxury hotel operators in India.
In terms of financial performance, Leela Hotels reported a sharp turnaround in FY25, with profit after tax rising to Rs 47.66 crore from a loss of Rs 2.13 crore in FY24. Revenue also rose 15% year-on-year to Rs 1,406.56 crore. However, the company’s post-issue P/E multiple stands high at over 213 times, leading many analysts to term the IPO fully priced.
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Proceeds from the fresh issue will be used to repay borrowings across several group properties, including those in Udaipur, Chennai, and Delhi, as well as for general corporate purposes.While the company brings a premium brand and improving operational numbers to the table, investors seem to be taking a wait-and-watch approach ahead of its listing.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of Economic Times)
