Juniper Hotels IPO: All You Need To Know

Juniper Hotels Ltd. will launch its initial public offering on Wednesday to raise up to Rs 1,800 crore.

The hospitality firm has set a price band of Rs 342–360 per share for its three-day IPO, which is entirely a fresh issue of five crore shares.

The minimum application lot size is 40 shares, requiring a minimum investment of Rs 14,400 for retail investors. Qualified institutional buyers are required to invest a minimum of 14 lots or 560 shares, while non-institutional investors must invest a minimum of 70 lots or 2,800 shares.

The maiden offer, which concludes on Friday, is set to list on the BSE and the National Stock Exchange, with a tentative listing date scheduled for Feb. 28.

Issue Details

• 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.

Use Of Proceeds

The net proceeds are proposed to be utilised for repayment or pre-payment, in full or in part, of certain outstanding borrowings availed by the company and its recent acquisitions, as well as general corporate purposes.

Business

Established in September 1985, Juniper specialises in luxury hotel development and ownership. As of Sept. 30, 2023, the company operates seven hotels and serviced apartments, boasting a collective total of 1,836 rooms.

Co-owned by Saraf Hotels Ltd. and Two Seas Holdings Ltd., an affiliate of Hyatt Hotels Corp., Juniper benefits from a strategic partnership uniting a hotel developer with an international hospitality giant.

Juniper operates properties in Mumbai, Delhi, Ahmedabad, Lucknow, Raipur and Hampi in the luxury, upper upscale and upscale segments.

Financial Performance

The company's revenue has more than doubled in the last financial year in comparison to fiscal 2022, leading to a significant increase in the Ebitda and margin.

The company has posted a loss of Rs 1.86 crore in the last fiscal. However, the loss, which is mainly due to high finance costs and employee benefit expenses, has narrowed from Rs 199.39 crore in fiscal 2021.

Key Risks

1. Both the company and its subsidiary have encountered previous losses and might necessitate future funding for their ongoing operations. Failure of investments in these subsidiaries could introduce supplementary liabilities and detrimentally affect the overall business.

2. Predominantly, the company garners its revenue (91% in the first half of the current fiscal) from three key properties – hotels/serviced apartments located in Mumbai and New Delhi. Any adverse developments impacting these establishments could potentially undermine the company's operations.

3. Juniper has documented instances of negative operating cash flows in its historical records.

4. The company's operations are susceptible to seasonal and cyclical fluctuations, thereby inducing variability in its earnings and cash flow over time.

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