Dalal Street is buzzing with new IPOs, and Juniper Hotels Private Limited is one among them to watch. Known for its luxury hotels under the Hyatt brand in India, Juniper Hotels is now going public. The shares are set at a price range of ₹342 to ₹360, with the subscription period open from February 21 to 23.
In this blog, let’s dive into the specifics of the IPO, analysing the benefits and potential pitfalls in order to provide prospective investors with a thorough picture. Is this the perfect investment opportunity that you have been looking for? Let’s find out.
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About Juniper Hotels
Juniper Hotels, a luxury hotel development and ownership company, is a 50/50 joint venture between the Saraf Group alongside its affiliate, Juniper Investments, and the Hyatt Group via Two Seas Holdings. With a partnership spanning over 40 years, Juniper Hotels stands as the largest owner of Hyatt-affiliated hotels in India by number of keys as of 2023.
Juniper Hotels specialises in spotting opportunities within hospitality destinations, developing upscale hotels in these areas, and enhancing their value through proactive asset management. And also concentrate on delivering a first-rate experience for guests while effectively using the resources.
Also read: Economics of the tourism and hospitality industry in India
History
The Saraf Group, led by Arun Kumar Saraf, started its hospitality business with the Yak and Yeti Hotel in Kathmandu, Nepal, in 1977, a project initiated by his late father, Mr. Radhe Shyam Saraf. This was the beginning of their leading role in hotel development. In 1982, the group was instrumental in bringing the Hyatt brand to India, an important milestone that involved developing the largest private hotel in Delhi.
In 1998, the Saraf Group and Hyatt came together to create Juniper Hotels. Their joint efforts led to the opening of the Grand Hyatt Mumbai Hotel and Residences in 2004, their main project. Over the years, the Saraf Group has built more than eleven hotels in India and Nepal, establishing a legacy of excellence in the hospitality industry.
Also, Juniper Hotels was initially established as Seajuli Finance Private Limited in 1985, representing its business at that time. Later, in December 2003, the company changed its name to Juniper Hotels Private Limited to better reflect its core business following the commencement of hotel operations.
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Vision & mission
Juniper Hotels is dedicated to driving growth through excellence, efficiency, and innovation, all while upholding a steadfast commitment to sustainability. The company’s vision is to be a leader in the hospitality industry by developing and managing landmark properties that deliver exceptional value to shareholders, guests, employees, and partners alike.
The mission of Juniper Hotels is rooted in the pursuit of unmatched quality, exceptional service, and enduring sustainability. The company sets clear objectives: to consistently delight guests, build strong partnerships, empower its teams, and contribute positively to the communities in which it operates.
Juniper Hotels aims to chart a course towards a prosperous future, positioning itself as synonymous with excellence and a deep commitment to fostering a brighter, sustainable future.
Juniper Hotels today!
Currently, Juniper Hotels has an impressive portfolio of seven hotels and serviced apartments, offering a total of 1836 keys, which includes 245 serviced apartments. These are located in major Indian cities such as Mumbai, Delhi, Ahmedabad, Lucknow, Raipur, and Hampi. All these establishments are affiliated with and operated by Hyatt, a renowned global hotel brand.
This makes Juniper Hotels unique as the only hotel development company in India that Hyatt has chosen for a strategic investment. As of the end of September 2023, they own nearly one-fifth (19.6%) of all rooms and apartments linked to the Hyatt brand in India. This highlights Juniper Hotels’ substantial role in the country’s hospitality sector.
In terms of financial performance, for FY23, Juniper Hotels saw its operational revenue skyrocket to ₹6,668.5 million, marking a 116% increase from ₹3,087 million in the previous year. However, the company reported a net loss of ₹14.97 million in FY23, which is an improvement from a net loss of ₹1,880 million in FY22.
Juniper Hotels financials
| Financials | FY 23 (in ₹ million) | FY 22 (in ₹ million) | FY 21 (in ₹ million) |
| Revenue after operations | 6,668.54 | 3,086.89 | 1,663.51 |
| Profit after tax | -14.97 | -1,880.31 | -1,994.86 |
| Net worth | 3,545.07 | 3,563.67 | 5,438.97 |
| Earnings per share | -0.10 | -13.08 | -13.88 |
| Total borrowings | 20,456.08 | 21,218.09 | 18,304.77 |
Juniper Hotels private limited IPO
| IPO opening date | February 21, 2024 |
| Date of closure | February 23, 2024 |
| Face value | ₹10 |
| IPO price band | ₹342- ₹360 |
| Lot size | 40 |
| Issue size | ₹18,000 million |
| Fresh issue | ₹18,000 million |
| IPO reservations | Qualified Institutional Buyers (QIBs)- 75%Retail investors- 10%Non-institutional investors (NIIs)- 15% |
Juniper Hotels private limited IPO GMP also known as grey market premium is currently ₹0. KFin Technologies is the registrar of the issue, and JM Financial, CLSA India, and ICICI Securities are the book runners. The NSE and BSE will list the shares.
Shareholding pattern pre-issue
| Shareholder | Shareholding percentage |
| Saraf Hotels | 44.68 |
| Two Seas Holdings | 50 |
| Juniper Investments | 5.32 |
Fund utilisation plan
A substantial amount, ₹15,000 million, of the total net proceeds raised through the issue will be used to repay, prepay, or redeem, in whole or in part, some existing loans that the company and its subsidiaries, Chartered Hotels Private Limited (CHPL) and Chartered Hampi Hotels Private Limited (CHHPL), have taken out. The rest will be used for general corporate purposes.
Investment considerations
Strengths
- Strategic business model: The company offers a strong platform for growth and operational excellence by integrating asset ownership with the renowned Hyatt brand.
- Diverse revenue streams: Juniper Hotels enhances its revenue with diverse services, including serviced apartments, restaurants, and MICE services (Meetings, Incentives, Conferences & Exhibitions), ensuring the effective use of resources.
- Growth potential: Juniper Hotels is positioned to profit from expanding GDP, income levels, and consumer expenditure as a result of India’s economic expansion.
Weakness
- Financial indebtedness: As of September 30, 2023, Juniper Hotels owes ₹22,527.47 million, which limits its operational flexibility and made it more susceptible to economic downturns. This financial leverage affects the company’s capacity to service debt, respond to changes in the industry, and engage in expansion, all of which could have an impact on the company’s future financial performance and business prospects.
- Seasonal demand: The hotel sector experiences seasonal demand. The year-round occupancy rates of business and leisure destinations differ; business destinations witness a notable decline in December, while leisure destinations see a decline in occupancy from May to October.
Bottomline
Juniper hotels private limited IPO presents a unique opportunity, combining a strategic business model with the potential for growth in a booming economy. However, investors must weigh this against the company’s financial indebtedness and the seasonal nature of the hospitality industry. Assessing the pros and cons is essential in determining if Juniper Hotels aligns with your investment goals.
