Competitive Strengths

Brand Prestige and Market Recognition The Leela brand, with over 250 awards since January 2021, stands as a globally recognized symbol of Indian luxury hospitality. It has consistently earned accolades, including #1 in the Travel + Leisure World’s Best Awards in 2020 and 2021, and ranked among the top three in 2023 and 2024. It was also named India’s best hotel brand for five consecutive years (2020–2024) and a 2025 Global Vision Honoree by Travel + Leisure. This distinction is built on a 40-year legacy of luxury, guest-centric service, and architectural excellence. The portfolio includes five owned hotels (1,224 keys), eight managed hotels (1,931 keys), one franchised hotel (398 keys), and six hotels in development (475 keys), with additional agreements covering 203 keys. The brand’s service culture, grounded in “AtithiDevoBhava,” and LQA’s FY25 audit score of 82.9% highlight its operational excellence. A high NPS of 85.11 in FY25 reflects guest satisfaction, outperforming all listed hospitality peers.

Operational Excellence and Strategic Advantage Leela’s properties outpace industry metrics. In FY25, its owned portfolio’s RevPAR was 1.4x the Indian luxury hotel average, and its TRevPAR stood at Rs29,575—also 1.4x the segment average. Direct channels contributed 65.36% of room revenue, underscoring brand strength. Managed portfolio ARR and RevPAR were 1.3x and 1.2x of market peers, respectively. The EBITDA margin of 48.92% in FY25 led the industry, outperforming listed peers (33.66%–45.60%). International guests drove 46.8% of room revenues, reflecting global appeal. With India’s luxury tourism expected to grow at a 6.6% CAGR (FY23–FY28), Leela is well positioned to benefit from rising affluence, urbanization, and discretionary spending. The five owned hotels—Bengaluru, Chennai, New Delhi, Jaipur, and Udaipur—are strategically located in high-barrier markets. These “modern palaces” blend heritage with modernity and achieved an 11.8% RevPAR CAGR (FY19–FY24), significantly above the 8.6% industry average, reinforcing their leading status in key leisure and business hubs.

Distinctive Property Features and Market Position Each of Leela’s flagship owned hotels has unique attributes. The Leela Palace Bengaluru, on 8.23 acres in the city’s CBD, was named #1 City Hotel in India (2024). Chennai’s 4.8-acre sea-facing property, inspired by Chettinad architecture, won India’s Best Eco-Friendly Luxury Hotel (2019). The New Delhi hotel, on 3 acres in the diplomatic enclave, is preferred by dignitaries and earned the #3 City Hotel in India ranking (2024). The Jaipur palace, set on 8.1 acres near heritage sites, won Best Family Hotel (2022). Udaipur’s 7-acre lakeside hotel was named the World’s Best Hotel (2019) and acquired 77,008 sq. ft. for future expansion. These hotels are in land-constrained areas with no upcoming competitive supply, and offer rooms 36% larger than industry norms. Their ARR was 1.4x above the luxury average in FY25. Strategic locations and design superiority ensure market leadership, enabling premium pricing and reinforcing the brand’s network effect.

Revenue Diversification and Sustainable Growth Leela’s luxury ecosystem drives diversified revenue. In FY25, 56.96% of room revenues came from leisure, 16.97% from corporates, and 25.45% from group bookings. Across 72 F&B venues and 13 spas—including a Soneva collaboration in Bengaluru—its offerings span luxury dining, wellness, and MICE events. Non-room revenue contributed 51.7% of total income in FY25. Rigorous asset management boosted RevPAR from 1.2x in FY19 to 1.4x in FY25, aided by Rs6,545.84 million capex (65.37% incurred). For instance, Jaipur’s ARR rose from Rs11,928 in FY20 to Rs28,756 in FY25, while Kovalam's ARR and RevPAR surged by 108.25% and 202.31%, respectively. Employee costs and power expenses were below industry averages at 16.3% and 3.7%. Sustainability is core: 51.08% of FY24 electricity was renewable. All owned hotels have platinum green certifications and ISO accreditations. With a net-zero emissions goal by 2050, Leela’s focus on efficiency, sustainability, and premium service secures its competitive edge.

Experienced Leadership and Robust Governance Structure Scholars Bangalore benefits from a highly experienced, cycle-tested management team led by three Key Managerial Personnel and seven senior leaders, supported by 13 general managers and regional VPs. The core team boasts an average of over 20 years of experience in hospitality, asset and revenue management, and sales and marketing. Their expertise has driven strong growth in RevPAR, TRevPAR, revenue from operations, and EBITDA. CEO AnuraagBhatnagar and CFO/Head of Asset Management Ravi Shankar bring deep domestic and global hospitality experience. The company is backed by a seasoned Board, led by an independent Chairman and composed of diverse, renowned industry professionals. Their governance model emphasizes a balanced board structure, significant promoter group ownership in Leela post-offer (reflecting long-term value creation commitment), and robust ESG principles. The firm is proactive in decarbonization and sustainability, tracking ESG progress and continuously improving standards, ensuring responsible operations and community impact.

Strategic Sponsorship by Brookfield and Global Synergies The company is promoted by Brookfield, a top-tier global alternative asset manager with over US$1 trillion in AUM as of March 31, 2025. Brookfield's global hospitality portfolio includes around 44,000 keys across 181 hotels, with landmark assets like Pendry Manhattan West (New York) and Centre Parcs (UK). In India, Brookfield manages over US$30 billion in assets, with a 16-year presence since 2009. It has developed more than 10 million sq. ft. of real estate (9.93 msf office, 0.28 msf retail) across major Indian cities. Scholars Bangalore leverages a development management agreement with Brookfield affiliate Brookprop, utilizing their expertise for project execution or partnering with them for quality delivery. This ensures timely, capital-efficient, luxury-standard developments. Brookfield’s deep lender and vendor networks, and disciplined capex culture, offer strategic support. As a NYSE and TSX-listed entity, Brookfield also brings strong corporate governance, significantly enhancing Scholars Bangalore’s growth and operational credibility.

Peer Comparison

Key Risks & Concerns

Cyclicality in Hospitality Industry: The hospitality sector is highly cyclical, with RevPAR impacted by macroeconomic shifts and events like pandemics or terror attacks. Premium hotels face sharper downturns and high fixed costs, increasing cash flow risks during weak periods.

Brookfield Group Support Risk: Schloss relies heavily on Brookfield’s backing. Any change in Brookfield’s support or strategy could disrupt operations, capital allocation, and growth plans, making continued alignment essential.

Occupancy and ARR Risk: Despite recent highs in occupancy and ADR, sustainability is uncertain due to weekday-weekend seasonality, rising supply, and growing outbound travel. Any moderation could pressure revenues and margins.

Outlook and Valuation

India’s luxury hospitality sector is entering a massive growth phase, driven by booming domestic tourism, corporate travel, and rising inbound arrivals. Domestic tourist visits are projected to more than double from 2.8 billion in 2024 to 6 billion by 2030 (CAGR: 13.4%), while international arrivals are rebounding strongly, with 9.7 million FTAs in 2024. The sector’s long-term potential is underpinned by massive infrastructure investments—$1.9 trillion across 9,700+ projects—and robust government support through tourism-friendly schemes. Against this backdrop, Schloss Bangalore (Leela Hotels) stands out, combining premium real estate in India’s key cities with a strategic partnership with Brookfield. Its RevPAR CAGR of 11.8% (FY19–FY24) and 49.78% EBITDA margin in FY25 significantly outperform peers.

With 3,553 operational keys and plans to add 678 more by 2028, Leela’s growth story is far from over. Its asset-light model, powered by high-ROI managed properties, allows scalable expansion with limited capital. Strong brand equity (NPS: 85.11 in FY25, highest in peer set) and occupancy in land-scarce, high-demand zones like Bengaluru and Delhi ensure pricing power—its ARR of Rs 22,545 is 1.4x the luxury average. Schloss Bangalore is well positioned to benefit from India’s growing GCC presence (projected $105B revenue by FY30) and urbanization-led travel surge. Supported by Brookfield’s $1T global platform and deep hospitality execution capabilities, Leela is not only riding the industry wave but also defining its luxury hospitality.

Schloss Bangalore Limited presents a compelling opportunity for IPO investors seeking exposure to India’s luxury hospitality sector. With a legacy brand—The Leela—renowned for global acclaim and consistent industry recognition, the company commands strong pricing power and guest loyalty. Its strategic portfolio of five iconic, high-barrier-to-entry properties across key Indian cities delivers superior RevPAR (1.4x industry average) and strong operational efficiency. Schloss’s diversified revenue model, with over 50% from non-room sources, enhances resilience. Backed by Brookfield, its capital-efficient growth strategy includes marquee property developments, asset-light expansions, and branded residences. Still, with experienced leadership, strong governance, and proven ability to scale profitably, Schloss is well-positioned to benefit from rising domestic and international travel demand. The company will repay its debt from the IPO proceeds, which will result in lower D/E and improved profitability. The company is valued at a FY25 EV/EBITDA multiple of 26.3x at post-issue capital of the upper price band. Schloss Bangalore Ltd. is trading at a higher valuation in comparison to EIH despite lower return ratios. Schloss Bangalore's Net margin is low on account of higher depreciation & interest costs. Lower occupancy & higher depreciation also lead to poor ROCE. The Indian Hotels Company Ltd & ITC Hotels' higher valuation is justified on account of their larger size. Moreover, Schloss Bangalore Ltd. has significant concentration risk & The Indian Hotels has better return ratios.  We believe the IPO is fairly priced. Long-term investors with a high-risk appetite may SUBSCRIBE to the issue, however, listing gains are likely to be muted.

Key Information

Use of Proceeds: Objects of the Offer – The total issue size is Rs.3500 cr, which comprises fresh issue of Rs. 2500 cr (71.42%) and offer for sale of Rs. 1000 cr (28.58%). The company intends to utilize a portion of the Net Proceeds towards repayment/prepayment/redemption of certain outstanding borrowings (~Rs 2,300 cr), including the interest accrued and prepayment penalties as appliable, availed by the company and certain of its wholly owned subsidiaries and step-down subsidiaries namely Schloss Chanakya, Schloss Chennai, Schloss Udaipur and TPRPL, through investment in such subsidiaries. Net proceeds will also be utilized for general corporate purposes which include, strategic initiatives, funding organic and inorganic growth opportunities, including acquisitions, capital expenditure towards enhancement and upkeep of hotel assets owned by our company and subsidiaries, including by development, refurbishment and/ or renovation of such assets, strengthening marketing capabilities and brand building exercises, funding working capital requirements of our Company and Subsidiaries; and/or, meeting ongoing general corporate purposes or contingencies.

Book running lead managers: JM Financial Limited, BofA Securities India Limited, Morgan Stanley India Company Private Limited, J.P. Morgan India Private Limited, Kotak Mahindra Capital Company Limited, Axis Capital Limited, Citigroup Global Markets India Private Limited, IIFL Capital Services Limited (Formerly known as IIFL Securities Limited), ICICI Securities Limited, MotilalOswal Investment Advisors Limited, SBI Capital Markets Limited

Management: Deepak Parekh (Chairman and Independent Director), Anuraag Bhatnagar (Whole-time Director and Chief Executive Officer), Ankur Gupta (Non-executive Director), Ananya Tripathi (Non-executive Director), Ashank Kothari (Non-Executive Director), Shai Zelering (Non-Executive Director), Mukesh Butani (Independent Director), Apurva Purohit (Independent Director), Ravi Shankar (Chief Financial Officer)