Schloss Bangalore Limited (Leela Hotels) - IPO

1. Any deterioration in the quality or reputation of our "The Leela" brand could have an adverse effect on our business, financial condition and results of operations.

2. A significant portion of our total income is derived from the five hotels owned by us (aggregating to 93.46%, 93.77% and 91.13% of our total income for the Financial Year 2025, Financial Year 2024 and Financial Year 2023, respectively) and any adverse developments affecting such hotels or regions could have an adverse effect on our business, results of operations and financial condition.

3. Our Company and certain of our Material Subsidiaries have incurred losses in the past during Financial Years 2024 and 2023 (Rs.(21.27) million for the Financial Year 2024 and Rs.(616.79) million for the Financial Year 2023 (on a consolidated and restated basis)), as well as during Financial Year 2025 for three of our Material Subsidiaries, and may experience losses in the future which could result in an adverse effect on our business, cash flows and financial condition.

4. Our Company and certain of our Material Subsidiaries have had negative net cash flows in the past and may continue to have negative cash flows in the future, which could adversely affect our results of operations and financial condition.

5. We have granted security interests over certain of our assets, and any failure to satisfy our obligations under our secured borrowings (Rs.39,087.46 million as of Financial Year 2025) could lead to invocation of security interest, resulting in a forced sale or seizure of such assets.

6. Our Company and certain of our Material Subsidiaries have had negative net worth in the past (Rs.(28,257.23) million as at March 31, 2024, and Rs.(25,119.63) million as at March 31, 2023, on a consolidated and restated basis) and may experience negative net worth in the future which could result in an adverse effect on our business, cash flows, financial condition and results of operations.

7. We have substantial indebtedness which requires significant cash flows to service and limits our ability to operate freely. As of March 31, 2025, we had outstanding borrowings of Rs.39,087.46 million on a restated and consolidated basis. Further, our finance costs as a percentage of total income for the Financial Year 2025 amounted to 32.57%. In addition, we may require additional financing in the future in order to continue to grow our business, which may not be available on acceptable terms, or at all.

8. We are exposed to risks associated with the renovation and refurbishment of existing hotels. Delays in the renovation and refurbishment of existing hotels in our Portfolio may have an adverse effect on our business, financial condition and results of operations

9. We are exposed to risks associated with the construction of new hotels, including The Leela Ayodhya, The Leela Palace Agra, The Leela Ranthambore, The Leela Palace Srinagar and The Leela Bandhavgarh. Delays in the construction of new hotels may have an adverse effect on our business, financial condition and results of operations.

10. The determination of the Price Band is based on various factors and assumptions and the Offer Price of the Equity Shares, market capitalization and price to earnings ratio based on the Offer Price of the Equity Shares, may not be indicative of the market price of the Company on listing or thereafter and, as a result, you may lose a significant part or all of your investment