Juniper Hotels IPO: Should you subscribe to the issue?

Juniper Hotels, owner of ‘Hyatt’ chain of hotels is raising INR 1,800 crore in its initial public offering IPO, through an issue of 5 crore fresh equity shares.

Juniper Hotels allocated 2.25 crore shares worth INR 810 crore to anchor investors at INR 360 apiece, at the upper end of the price band.

The initial public offering (IPO) by Juniper Hotels will kick-off for public bidding on Wednesday, February 21.

Investors can apply for a minimum of one lot of 40 shares and its multiples thereafter.

The issue will be sold in the price band of INR 342-360.

Analysts have mixed views on the IPO that is scheduled to conclude on Friday, February 23.

Improved efficiencies, acquisitions and expansion plans for the hospitality brand might present opportunities for some, others advised investors to give the IPO a skip due to mounting debt and its asset-heavy business model.

The net proceeds from the issue shall be utilized towards repayment/prepayment/redemption of certain outstanding borrowings, partly or fully, availed by the company.

Juniper Hotel’s revenue grew at a CAGR of 100.20 per cent over FY21-23 period, while EBITDA came in at INR 271.9 crore in FY23 compared to a negative EBITDA of INR 43 lakh in FY21.

The company’s net loss decreased to INR 1.5 crore in FY23 from the net loss of INR 19.95 crore posted in FY21, according to StoxBox.

A ‘subscribe’ call for the IPO issue comes from experts on the back of enhancement of facilities, exploring value accretive acquisition of assets and selective expansion, and increased utilization of space.

Ahead of its IPO, Juniper Hotels’ several anchor investors include Fidelity Funds, Government Pension Fund Global, Carmignac Portfolio, HSBC Global Investment, Nedgroup Investment, Marshall Wace Investment Strategies, Natixis International Funds, Goldman Sachs and Societe Generale.

The company has reserved 75 per cent of the offer to qualified institutional bidders (QIBs), with non-institutional investors receiving 15 per cent, and the remaining 10 per cent allocated to retail investors.

Based on annualized FY24 earnings and fully diluted post-IPO paid up capital, company’s operational metrics remain healthy, but interest costs are weighing on profitability bringing bottom line to net loss.

Other analysts considered the momentum in the secondary market and welcoming announcements made in the interim Budget to promote the hospitality and tourism industry which can improve the bottom lines in coming years, recommending only high- risk investors to place their bets.

About Juniper Hotels

Juniper Hotels, incorporated in September 1985, is a luxury hotel development and ownership company. It operates seven hotels and serviced apartments with a total of 1,836 rooms as of September 30, 2023,

It has hotels and serviced apartments in Mumbai, Delhi, Ahmedabad, Lucknow, Raipur, and Hampi in the luxury, upper upscale and upscale categories.

Grand Hyatt Mumbai Hotel and Residences is India’s largest luxury hotel, while Hyatt Regency Lucknow and Hyatt Regency Ahmedabad are the biggest upper upscale hotels in their respective markets. Hyatt Raipur is the only upper upscale hotel in the city. Juniper Hotels is co-owned by Saraf Hotels Ltd and Two Seas Holdings.

JM Financial, CLSA India and ICICI Securities are the book running lead managers of the Juniper Hotels IPO, while Kfin Technologies Ltd is the registrar for the issue.

Shares of the company are set to be listed on both BSE and NSE with Wednesday, February 28 as the tentative date of listing

 Conclusion

  • The Juniper Hotels IPO will run from Feb 21 to Feb 23.
  • The IPO price band has been fixed at INR 342-360 per share.
  • The IPO issue size stands at INR 1,800 crore; entirely fresh issue

Disclaimer:

Qrius provides stock market news for informational purposes only and does not provide investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

Juniper Hotels