The Leela Palaces, Hotels and Resorts is gearing up for an initial public offering (IPO) in India, with expectations of raising approximately $377 million, making it the largest IPO in the country’s hospitality sector. The IPO will see Brookfield, the promoter, selling 15% of its stake to the public initially and an additional 10% over the next three years. This move comes at a time when the travel and hospitality industry in India is thriving, and more companies are feeling confident to tap into the market and raise funds. The decision to go public is also seen as a strategic move to capitalize on the current buzz around IPOs.
Brookfield’s Ankur Gupta hinted at the impending IPO, citing the growth potential of the business as a driving factor. The IPO will exclude The Leela Mumbai, which is already listed under Hotel Leelaventure (HLV) Limited. Once listed, The Leela will join other prominent Indian hotel companies on the stock exchange, including Indian Hotels Company, East India Hospitality, Lemon Tree Hotels, and more. ITC Hotels has also recently received shareholder approval for the demerger of its hotel business, paving the way for its own listing. The move to go public is expected to further enhance the brand’s visibility and secure its position among globally recognized Indian luxury brands.
The listing of The Leela marks a significant turnaround for the luxury hotel chain, which faced financial distress five years ago. Under Brookfield’s stewardship, the brand has expanded from 8 to 15 hotels, with plans for nearly 20 properties across India. Brookfield aims to position Leela as a globally recognized Indian luxury brand, emphasizing the luxury quotient of the brand across its properties. The acquisition of Leela’s assets through bankruptcy proceedings in 2019 has proven to be a successful investment for Brookfield, setting the stage for the upcoming IPO and creating more opportunities for growth and expansion in the future.
The Indian hospitality sector has witnessed robust performance in early 2024, driven by increased corporate travel, weddings, and demand for Meetings, Incentives, Conferences, and Exhibitions (MICE). JLL’s Hotel Momentum India (HMI) report for the first quarter of 2024 highlights an 8.5% increase in average daily rates and an 11.4% rise in revenue per available room (RevPAR). The sector has also seen a surge in investments, with the hospitality industry attracting $401 million in 2023, nearly four times the transaction volume of the previous year. Global hotel chains are increasingly focusing on India, recognizing the country’s growing affluence and the subsequent rise in travel demand.
The strategic investments by global hotel chains in India underscore the country’s growing significance in the global hospitality landscape. Industry leaders from Marriott, Accor, Hyatt, Hilton, and IHG have identified India as a key market for future growth, further highlighting the potential of the Indian hospitality sector. The upcoming IPO of The Leela Palaces, Hotels and Resorts is a testament to the booming hospitality industry in India and the confidence of companies in the market’s growth prospects. With the sector showing strong performance and attracting increased investments, the future looks promising for Indian hospitality companies looking to expand and capitalize on the rising demand for luxury accommodations and experiences in the country.
