Leela's IPO is a bet that luxury tourism in India is just getting started

livemint.com:

Subscribe to enjoy similar stories. The stock market debut of The Leela Palaces, Hotels and Resorts is all set to fuel investor appetite for luxury-hotel stocks, experts said, as they expect strong demand for premium experiences to drive the current upcycle in the hotel industry for the next three to four years. Leela Palaces filed for an initial public offering (IPO) of ₹5,000 crore on 20 September.

Its listing will expand the roster of publicly traded luxury hotel stocks beyond India Hotels Company, which operates the Taj brand, and EIH, the parent company of the Oberoi chain of hotels. “(The hotel) industry is expecting room demand to grow by around 10%, while supply to grow by 6-7% over the next three to four years. This will keep occupancy (rates) high and support a consistent growth of room rates," Kaustabh Pawaskar, deputy vice president of research at Sharekhan by BNP Paribas told Mint.

Also read | Mint Primer: Why brokerages are looking at a dip in their earnings Experts are thus expecting healthy demand for Leela’s IPO, the largest in the hospitality segment to date. The IPO includes a fresh issue of shares worth ₹3,000 crore and an offer for sale worth ₹2,000 crore from its promoter Brookfield Asset Management, according to Leela’s draft red herring prospectus. Prashant Biyani, vice president of institutional equity research at Elara Capital told Mint, “Leela has a strong luxury brand and Brookfields’s backing.