Juniper Hotels Ltd.: IPO Details, Financial Performance, and Growth Prospects

Juniper Hotels Ltd. is gearing up to launch its initial public offering on Wednesday to raise Rs 1,800 crore. The hospitality company has fixed a price range of Rs 342–360 per share for its IPO, spanning over three days and comprising entirely of a fresh issue of five crore shares.

Retail investors can participate with a minimum application lot size of 40 shares, necessitating a minimum investment of Rs 14,400. Qualified institutional buyers are mandated to invest a minimum of 14 lots or 560 shares, while non-institutional investors must commit to a minimum of 70 lots or 2,800 shares. The IPO, which concludes on Friday, is slated to list on both the BSE and the National Stock Exchange.

Here are the details of the IPO issue:

Issue opens: Feb. 21

Issue closes: Feb. 23.

Face value: Rs 10 per share.

Price band: Rs 342–360 per share.

Lot size: 40 shares.

Fresh issue size: Rs 1,800 crore.

Total issue size: Rs 1,800 crore.

Issue type: Book-built issue IPO

Listing: BSE and NSE

Utilization of IPO Proceeds:

The net proceeds from the IPO are intended to be used for the repayment or pre-payment of certain outstanding borrowings obtained by the company, along with recent acquisitions, and for general corporate purposes.

About Juniper

Founded in September 1985, Juniper specializes in the development and ownership of luxury hotels. As of September 30, 2023, the company manages seven hotels and serviced apartments, offering a combined total of 1,836 rooms. Co-owned by Saraf Hotels Ltd. and Two Seas Holdings Ltd., an affiliate of Hyatt Hotels Corp., Juniper leverages a strategic partnership that combines a hotel developer with an international hospitality leader.

With properties located in Mumbai, Delhi, Ahmedabad, Lucknow, Raipur, and Hampi, Juniper operates in the luxury, upper upscale, and upscale segments of the hospitality industry.

Company’s Revenue Surges, Losses Narrow in Last Fiscal Year

The company witnessed a remarkable surge in revenue in the last fiscal year, more than doubling compared to fiscal 2022. This surge has resulted in a substantial increase in EBITDA and margins.

Despite posting a loss of Rs 1.86 crore in the last fiscal year, the company has managed to narrow its losses significantly from Rs 199.39 crore in fiscal 2021. The loss is primarily attributed to high finance costs and employee benefit expenses.

Financial, Operational, and Revenue Focus

1. Both the company and its subsidiary have experienced past losses and may require additional funding for their continued operations. Failure of investments in these subsidiaries could lead to additional liabilities and hurt the overall business.
2. The company’s operations are subject to seasonal and cyclical fluctuations, leading to variations in its earnings and cash flow over time.
3. Primarily, the company generates 91% of its revenue in the first half of the current fiscal year from three main properties – hotels/serviced apartments situated in Mumbai and New Delhi. Any negative developments affecting these establishments could potentially jeopardize the company’s operations.
4. Juniper has recorded instances of negative operating cash flows in its historical data.