IPO listed on 28 Feb'24
Juniper Hotels Ltd
Minimum Investment
₹ 14,400 / 40 shares
Grey market premium
₹ 8 (2% premium)
Issue price
₹ 360
Listing price
₹ 365
Listing gains
5 (1%)
Listing on
Feb 28, 2024
Our Verdict:
Avoid
- Although Juniper Hotels has experienced significant revenue growth over the last three years, its profitability has suffered due to high levels of debt, leading to substantial financial losses. Its struggle with losses is mainly due to high interest expenses, resulting in a debt-to-equity ratio of 2.6x, significantly above that of its competitors. Despite intentions to lower debt with IPO proceeds, the firm is likely to maintain high debt levels, particularly with its continuous expansion efforts.
- Juniper boasts impressive average room rates and revenue per average room (RPAR), as well as a strong operating margin. Yet, its return on capital employed (ROCE) is notably low.
- Even though the industry is showing positive trends, Juniper's financial situation appears weak in comparison. Investors should exercise caution given the firm’s reliance on an asset-heavy business model, rising debt, and continuous losses. Instead of participating in the IPO, it would be prudent to wait for better opportunities to enter, following an assessment of its financial results in the ensuing quarters.
About the company
Founded in
16 Sep'85
Managing director
Arun Kumar Saraf
- Juniper operates a luxury hotel chain affiliated with the 'Hyatt' brand, boasting a collection of seven luxury hotels and serviced properties, with a total of 1,836 keys as of September 30, 2023.
- Currently, the firm offers 116 serviced apartments at the Grand Hyatt Mumbai Hotel and Residences, alongside 129 serviced apartments at the Hyatt Delhi Residences. Furthermore, its portfolio includes a total of 22 distinguished restaurants and bars across its properties.
STRENGTHS
- Impressive Financial Growth: From FY21 to FY23, Juniper showcased significant financial improvement, witnessing a 100% Compound Annual Growth Rate (CAGR) in its Revenue from Operations and an impressive 281% increase in EBITDA.
- Growth in Operating Efficiency: Throughout the past three fiscal years, Juniper has seen notable advancements in its EBITDA margin, escalating from 11.51% in FY21 to 44.94% in FY23.
- Improved Hotel Occupancy Rates: Juniper has observed substantial enhancements in its average hotel occupancy rates, climbing from 34.23% in FY21 to 75.74% in FY23.
- Strategic and Exclusive Partnership: Benefitting from a unique alliance spanning over 40 years with Saraf Hotels, an established hotel developer in India, and the globally renowned Hyatt Hotels Corporation, Juniper stands as the sole hotel development entity in India to receive strategic investment from Hyatt.
RISK FACTORS
- History of Financial Losses: Juniper and its subsidiaries have experienced financial setbacks, incurring losses over the past three fiscal years and the six-month period concluding in September 2023. There is uncertainty regarding the company's ability to achieve profitability.
- Revenue Concentration Risk: A considerable share of the company's operational revenue (90.5% for the six months ending September 30, 2023) comes from three hotels/serviced apartments located in Mumbai and New Delhi. Negative developments in these properties or their operational regions could negatively impact Juniper's business performance, operational results, cash flow, and overall financial health.
- Debt Burden: Juniper carries a significant amount of debt, necessitating substantial cash flow for servicing, which restricts its operational flexibility. The company is part of a capital-intensive sector, with total debt amounting to Rs 2252.74 crore as of September 30, 2023.
- Dependence on Brand Agreements: Juniper’s hotels and serviced apartments operate under Hyatt brands on a non-exclusive basis. The firm has long-term agreements with Hyatt entities for the management and operation of these properties and the use of Hyatt's brands. Should these agreements end or not be renewed, its business, operational outcomes, cash flow, and financial stability could suffer adversely.
Issue details
Issue type
Mainstream
Issue size
₹ 1,800 crore
Fresh Issue
₹ 1,800 crore
OFS
₹ -
Price range
₹ 342 - 360
Lot size
40 shares
Issue Objective
The net proceeds from the issue are intended to be utilised towards:
- Repayment/ prepayment of certain outstanding borrowings availed by the company and its recent acquisitions; and
- General corporate purposes
Dates
Bidding open
21 Feb'24
Bidding close
23 Feb'24
Allotment date
26 Feb'24
Refund date
27 Feb'24
Listing
28 Feb'24
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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