The Leela Hotels IPO valued at $2.5 billion in dramatic turnaround

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₹21,000 crore) in a public listing likely in nine months, two people familiar with its plans said, in a remarkable turnaround for the luxury chain that changed hands under crushing debt and defaults five years ago. Promoter Brookfield has tapped JM Financial and Bank of America to be investment bankers, the people said on condition of anonymity, adding the Canadian investor plans to sell 15% to the public initially, and another 10% over the next three years. The IPO may be worth around ₹3,150 crore, making it the biggest in India's hospitality space.

"The Leela has not only emerged stronger than ever from its old worrisome debt issues but is also seeing a steady year-on-year rise in valuations on the back of higher margins. From a bankruptcy situation a few years ago, today, The Leela is commanding a $2.5-3 billion valuation," said the first person, adding the company plans to launch the IPO within nine months. While listed rivals Indian Hotels Co.

Ltd and East India Hotels Ltd are worth ₹83,228 crore and ₹27,384 crore, ITC Hotels has been estimated at ₹10,000 crore. IHCL and EIH operate the Taj and Oberoi brands respectively. A Bank of America spokesperson declined to comment, while emails sent to JM Financial, The Leela and Brookfield Asset management remained unanswered.

"While the hospitality business is generally buoyant currently, international demand for the Leela Palaces in India is particularly doing better than others. Occupancy rates and tariffs are both increasing for India's hotels and hospitality services, especially in those properties which offer appropriate wellness services. And The Leela Palaces particularly has an edge over others in that space," the person cited above said.