Juniper Hotels IPO Review

Juniper Hotels is a luxury hotel development and ownership company. Juniper Hotels is the largest owner, by number of Keys of “Hyatt” affiliated hotels in India as of September 30, 2023. Juniper Hotels IPO aims to raise Rs 1,800.00 crores. The issue is entirely a fresh issue of 5 crore shares.

IPO opensFeb 21, 2024
IPO ClosesFeb 23, 2024
IPO Size (Rs.)1,800.00 Cr
IPO Size (shares)50,000,000 shares
BreakupFresh issue only
Face Value:₹10 per share
IPO Price in Rs.₹342 to ₹360 per share
Minimum Lot40 Shares
Listing AtNSE , BSE
QIB ~50%
NII Quota~15
Retail Quota~35%
 Lead ManagerJm Financial, Clsa Indiaand ICICI Securities
RegistrarKfin

About Juniper Hotels IPO:

  • Juniper Hotels is a luxury hotel development and ownership company and is jointly held by Saraf Hotels and its affiliate, Juniper Investments and Two Seas Holdings (an indirect subsidiary of HHC- Hyatt Hotels Corporation). Juniper Hotels is the largest owner, by number of Keys of “Hyatt” affiliated hotels in India as of September 30, 2023. The company has a portfolio of 7 hotels and serviced apartments and operates a total of 1,836 keys.
  • Juniper Hotels is the only hotel development company in India with which Hyatt has a strategic investment. Juniper Hotels own 19.6% of Hyatt group affiliated hotel rooms and apartments in India as on September 30, 2023. 
  • The company’s network is spread over 1.33 million sq. ft. in land area, across seven hotels and serviced apartments are located across six cities in India, comprising established metro cities, emerging business destinations and upcoming tourist destinations, providing guest and geographic diversification.
  • The company’s hotels and serviced apartments are classified under three distinct segments: (a) luxury – the Grand Hyatt Mumbai Hotel and Residences and Andaz Delhi; (b) upper upscale – the Hyatt Delhi Residences, Hyatt Regency Ahmedabad, Hyatt Regency Lucknow, and Hyatt Raipur; and (c) upscale – Hyatt Place Hampi.
  • Juniper Hotels, is owned by Saraf Hotels and its affiliate Juniper Investments and Two Seas Holdings, an indirect subsidiary of Hyatt Hotels Corporation,
  • The company’s promoters and Hyatt have had a longstanding relationship of over 40 years. Out of the 8 Hyatt brands present in India Juniper Hotels has entered into trademark license agreements in relation to 5 such global brands, namely, “Hyatt”, “Grand Hyatt”, “Hyatt Regency”, “Hyatt Place” and “Andaz”.
  • Arun Kumar Saraf is one of the Promoters and the Chairman and Managing Director of the Company. 

Juniper Hotels IPO: Financials

Particulars/ Rs. Cr.H1Fy24H1Fy23230320222021
Revenue from operations336.1294.3666.9308.7166.4
EBITDA124.6140.4322.4101.522.2
EBITDA margin (%)36.90%43.70%44.90%29.50%11.50%
Restated Profit/ (Loss)-26.5-17.5-1.5-188-199.5
Equity Share Capital172.5143.7143.7143.7143.7
Net worth859.7339.1354.5356.4543.9
Total borrowings2,252.702,143.502,045.602,121.801,830.50
Restated EPS(1.82)(1.22)-0.1-13.1-13.9
NAV  (₹)59.123.624.724.837.9
Post issue Share Capital222.5    
FV10.0    
IPO price360.0    
EPS Fy23-0.1    
PE Fy23    
EPS Fy24 (annualized)-1.6    
PE Fy24  (annualized)    
Market cap in cr8,010.0    
Market cap / Sales12.01    

Anchor: Juniper Hotels IPO

Juniper Hotels garnered Rs 810 crore from a bunch of anchor investors ahead of IPO. Fidelity Funds, Government Pension Fund Global, Camrignac Portfolio, The Prudential Assurance Company, HSBC Global Investment Funds, Nedgroup Investment Funds, Marshall Wace Investment Strategies, Natixis International Funds, Schroder International, GAM Multistock, Goldman Sachs, and Societe Generale participated in the anchor book. Other investors were Kotak Mahindra Trustee, Tata Mutual Fund, Quant Mutual Fund, Ashoka Whiteoak ICAV, Baroda BNP Paribas Mutual Fund, ICICI Prudential Life Insurance Company, HDFC Life Insurance Company, Invesco India Equity Fund, Jupiter India Fund, Aditya Birla Sun Life Insurance Company, Bandhan Mutual Fund, Avendus, and Tata AIA Life Insurance. It made allocation to seven mutual funds via 15 schemes.

Juniper Hotels IPO: Salient Points

  • Most large players in the hotels space, especially the ones operating in the luxury and upscale segments, have bounced back well after two troubled years marked by lockdowns and travel restrictions in the Covid period, from 2020 to almost the middle of 2022.
  • The company’s operational metrics are healthy, but interest costs weigh on profitability.
  • Growing Indian tourism industry, particularly in the luxury segment bodes well for the company.
  • Strategic partnership with Hyatt Hotels Corporation is helpful.
  • Experienced management team and strong track record
  • Diversified portfolio across cities and segments with focus on Tier 1 cities.
  • The company has established specialised asset management teams with asset managers at each hotel. The company’s operations cluster enables it to review all revenue strategies implemented in driving business across the hotels, while the finance cluster gives the company the ability to analyse real-time financial and accounting MIS from a central location, giving the asset team a sharper insight into the cost structure, leading to better internal controls.
  • The Saraf Group and Hyatt have had a longstanding relationship of over 40 years, dating back to the opening of the first Hyatt hotel in India, namely, Hyatt Regency, Delhi, in 1982
  • Food & beverages contribution to revenues has increased from 25 per cent in FY21 to 32 per cent in 1HFY24,
  • The company’s food and beverages outlets include Annamaya, Celini, China House and Fifty Five East, among a few others.
  • According to the management, post-IPO since it will clear around 67% of its total debt, it will turn positive PAT
  • Juniper Hotels has total borrow-ings of about ₹2,267 crore as of September 2023. Debt to equity ratio is around 2.6 times as of
  • 1HFY24. The company is looking to repay about ₹1,500 crore of this loan amount from the IPO.
  • According to a Horwath HTL report, foreign demand for ho-tels in India would touch 100 percent of pre-Covid levels by FY25 and 130 per cent by FY27. Since the supply of rooms (8 per cent CAGR over FY24-27) would fall short of expected de-mand (10.6 per cent CAGR over FY24-27), the pricing power is set to remain firm for the hotels.
  • Juniper Hotels is the only hotel development company in India with which Hyatt has a strategic investment. Juniper Hotels own 19.6% of Hyatt group affiliated hotel rooms and apartments in India as on September 30, 2023. 
  • According to the Horwath Report, the land parcels for hotels of the scale of Grand Hyatt Mumbai Hotel and Residences and Andaz Delhi, are difficult to obtain and carry high costs and associated development risks. In turn, this limitation provides an added value benefit to established well-located hotels.
  • Peers
CompanyJuniper HotelsEIH Ltd.Chalet HotelsLemon Tree
Net Sales  ( Rs. Cr)666.924071336991
OPM40.833.444.552.2
D/E0.301.82
ROCE8.715.69.2210.1
RONW-0.110.612.816.7
P/ENA46.37085.6
P/BV36.61011.8
EV/EBIDTA33.4327.5427.1222.81
MCap/Sales12.0110.512.711.1
Market Cap ( Rs Cr)801025,34316,93210,953
  • Juniper Hotels IPO reported loss in FY23 and may turn the corner in Fy25.
  • I am neutral on Juniper Hotels IPO though I have a positive view of Hotel industry. Many chances of applying are less. I could be OK from Log term point of view.
  • GMP as heard on Social Media may be around Rs. 5.
  • Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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