Juniper Hotels Ltd, operating under the "Hyatt" brand, has submitted preliminary paperwork to Sebi, the capital markets regulator, to raise ₹1,800 crore ($241 million) through an initial public offering (IPO). The company's IPO will consist solely of fresh equity shares, excluding any Offer for Sale (OFS) components.
The IPO is being facilitated through a book-building process. The allotment will be divided as follows: a minimum of 75% of the issue will be made available to qualified institutional buyers on a proportional basis; 15% will be available to non-institutional investors; and the remaining 10% will be allocated to retail individual investors.
In addition to the IPO, Juniper Hotels is considering issuing additional equity shares through a private placement for a cash consideration of up to ₹350 crore ($47 million), subject to consultation with the issue's lead bankers. If successful, this placement would reduce the size of the new issue.
The net proceeds from the IPO, amounting to ₹1500 crore ($201 million), are planned for use in general corporate objectives. This includes repayment, prepayment, or redemption of any existing borrowings in full or in part, along with payment of accrued interest.
According to InvestingPro's real-time metrics, Juniper Hotels has been experiencing accelerating revenue growth and is deemed a prominent player in the Communications Equipment industry. Its liquid assets exceed short term obligations, and it operates with a moderate level of debt. Although the company was not profitable over the last twelve months, it has been trading at a high revenue valuation multiple and near its 52-week high.
Juniper Hotels is jointly owned by Saraf Hotels Limited and Two Seas Holdings Limited, a subsidiary of the international hospitality company Hyatt Hotels (NYSE:H) Corporation. As of June 30, 2023, according to the Howarth Report, Juniper Hotels has the second-largest geographic reach and boasts the most comprehensive inventory of upper-tier branded serviced apartments in Mumbai and New Delhi.
For fiscal year 2023, Juniper Hotels' revenue from operations surged more than twofold from ₹308.69 crore ($41 million) in FY22 to ₹666.85 crore ($89 million). The net loss for the same period narrowed from ₹188.03 crore ($25 million) in FY22 to ₹1.5 crore ($200,000). Among its competitors, it recorded the second-highest EBITDA margin in FY 2023, following Lemon Tree Hotels Ltd.
InvestingPro Tips suggest that the company's strong return over the last three months and the large price uptick over the last six months indicate a potentially promising investment. However, potential investors should also note that the company does not currently pay a dividend to shareholders. For more in-depth analysis and tips, consider checking out the InvestingPro platform here.
The book-running lead managers for the offer are JM Financial Limited, CLSA India Private Limited, and ICICI Securities Limited. KFin Technologies Limited will act as the registrar. The company's equity shares are scheduled to be listed on the BSE and NSE.
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