Juniper Hotels IPO Review – GMP, Financials & More

Juniper Hotels IPO Review is facing an IPO issue of Rs. 1800 Cr opens on February 21, 2024. The issue will close on February 23 and be listed on the exchange on February 28, 2024. In this article, we will look at Juniper Hotels Limited IPO Review 2024 and analyze its strengths and weaknesses. Read on to find out!

Juniper Hotels IPO Review

About Us

Juniper Hotels is an owner and developer of luxury hotels and the largest hotel owner. hyatt Partner hotels in India. The company has a portfolio of seven hotels and serviced apartments and operates over 1,836 keys.

The company has hotels and serviced apartments across Mumbai, Delhi, Ahmedabad, Lucknow, Raipur and Hampi. Juniper Hotels is jointly owned by Saraf Hotels and Two Seas Holding Holdings, an indirect subsidiary of the Hyatt Group.

Juniper has two luxury hotels – Grand Hyatt Mumbai Hotel and Andaz Delhi. There are four luxury hotels namely Hyatt Delhi Residences, Regency Ahmedabad, Regency Lucknow and Hyatt Raipur. There is also one luxury hotel called Hyatt Place Hampi.

The company has hotels spread across 1.43 Lakh SqFt in commercial areas and 1.05 Lakh SqFt in MICE areas. MICE stands for Meetings, Incentives, Conferences and Exhibitions. MICE was created as a separate category from the hotel sector to distinguish it from other forms of tourism.

Industry introduction

Chain-affiliated room supply in India currently stands at 1.7 million hotel rooms as of FY23. The highest growth was seen in FY08-FY15 at a CAGR of 15%. From FY16 to FY23, the industry grew at a steady rate of 6.1% CAGR. The industry is expected to add approximately 60,000 rooms between October 2023 and March 2027.

Concentration in the luxury and premium luxury segments continues to be diluted, resulting in increased demand for the luxury segment. In the future, the high-end premium off-scale segment will account for approximately 25% of new supply. 24%, 20% and 31% are expected to come from premium, upper mid and mid-economy classes respectively.

Foreign trade arrivals hit a high in FY19 before falling to a new low in FY20 due to the rise in pandemics. Subsequently, demand reached 87.5% in FY24. FY23 saw strong demand growth compared to FY19, primarily driven by corporate and MICE travel demand.

High growth rates are expected to continue in FY24, but are expected to slow due to elections in early FY25. Long-term FTA demand grew at a compound annual growth rate (CAGR) of 9.8% in FY08-23 and is expected to grow by 11% in FY26 and FY27.

The industry is expected to grow due to the increasing demand for MICE travel and leisure travel. Weddings and other social events will also play a significant role in driving huge demand for this sector.

Juniper Hotel – FinanceS

Juniper Hotels’ FY23 average occupancy rate was reported to be 76%, up approximately 2200 bps points from 54% in FY22. The current average occupancy rate is 74.84%. The revenue per available room was Rs. 9875 as of FY23, steadily increasing from Rs. 5657 in FY21 at a CAGR of 32%.

The company derives nearly 48% of its revenue from hotel rooms, while 33% comes from the food and beverage segment. Serviced apartments bring in another 13%. Juniper reported operating revenue of Rs. 667 Cr in FY23, an increase of 116% from Rs. 309Cr. However, the company has continued to record losses for the past three years and has not yet turned a profit.

Net loss decreased from Rs. 199 Cr in FY21 to Rs. 1.49Cr in 2023. The company paid about Rs. It offers high leverage with a finance cost of 26.6 Cr. Without debt on the balance sheet, the company would not have been able to break even in FY23. The company holds 50 billion won in long-term borrowings. The debt burden in 2009 increased at a CAGR of 7% compared to FY21-23.

Juniper Hotels – Key Players

Juniper Hotels is the smallest player in the industry, accounting for nearly one-tenth of India’s largest hoteliers. Indian Hotel Company. It is also the only company to post a loss in FY23. Because the company reports losses, we cannot compare the company’s prices to its earnings or yields with its competitors.

Company Strengths

1. Expertise in finding real estate opportunities: The company has established a strong presence in India’s key markets and has placed luxury properties in the heart of India’s most prime locations.
2. Improve operational efficiency and profitability: Juniper has successfully expanded revenue and margins without compromising the customer experience.
3. Multiple revenue streams: Juniper offers luxury hotels and serviced apartments that meet two separate needs. While hotel demand fell 65% during the pandemic, demand for serviced apartments remained robust.
4. Welcome industry trends: India’s growing young population and rising GDP per capita are factors that Juniper and other hoteliers can benefit from.
5. Experienced Management: The company was founded by its promoter and founder, Mr. It is run by Arun Kumar Saraf. He has over 50 years of experience in the hotel industry.

company’s weaknesses

1. Not yet profitable: The company and its subsidiaries have not yet succeeded in making Juniper a profitable enterprise. A high debt structure weighs down and erodes a company’s profitability.
2. Delay in loan repayment to affiliates: During the pandemic, the company’s subsidiaries were unable to pay their loans, resulting in delayed payments after their due dates. However, the company drafted a loan restructuring proposal that was approved by a consortium of lenders.
3. Revenue Concentration: Two company-owned luxury and residence hotels Grand Hyatt Mumbai & Andaz Deli It is responsible for approximately 90% of the company’s total revenue. This shows that there is a very high dependence on these two key properties.
4. Brand reputation of affiliated brands: As the hotel is owned by Juniper, a member of the Hyatt Group, it is very important for the Hyatt brand to succeed in order for Juniper to achieve good results.

Juniper Hotel – GMP

As of the date of this article, the Gray Market premium for Juniper Hotels stock has not yet been disclosed. We will update the article with our respective expectations as soon as GMP is updated.

Key IPO Information

promoter: Arun Kumar Saraf, Saraf Hotel Ltd, Two Seas Holding Ltd and Juniper Investments Ltd

Book Operations Lead Manager: JM Financial Ltd., CLSA India Pvt Ltd. and ICICI Securities Ltd.

Proposal registered by: K-Fintech Co., Ltd.

purpose of the problem

1. Of the net proceeds of Rs 1500 Cr will be utilized by the company to repay the loan taken as part of recent acquisition of CHPL and CHHPL.
2. The remaining amount will be used for general corporate purposes.

conclusion

In conclusion, Juniper Hotels IPO Review presents a mixed picture. The company has a strong presence in key markets through key real estate holdings. However, the company has yet to manage its debt load and turn Juniper into a profitable venture, and its concentration of revenue in a few assets remains a risk.

Nonetheless, while seasoned management and favorable industry trends are positive, investors should carefully evaluate the risks and growth potential before considering this IPO.

Just a few days ago we wrote about a very similar venture. Apijay Surendra Park Hotelwas a hotel group affiliated with The Park Hotels. If you were to bet on one of these companies, which one would you choose? Let us know in the comments below.

Written by Nasir Hussein

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