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Industry : Hotels

Juniper Hotel View all IPOs

Price Band

Rs. 342 – Rs. 360

Juniper Hotels is going public with a fresh issue. The issue opens on 21st February 2024.

MOJO CALL

Why

Avoid

MOJO CALL

Avoid

Neutral

Crippling Debt and consistently reporting losses

Juniper Hotels operates several prominent hotels across India, including the Grand Hyatt Mumbai, Hyatt Regency Ahmedabad, Andaz Delhi, and Hyatt Delhi Residencies. Despite significant revenue growth in recent fiscal years, the company has consistently reported losses. Even in H1FY24, the losses exceeded those of FY23.
The primary concern lies in the company's substantial debt burden. With total borrowings amounting to Rs 2,253 crore, this represents a considerable liability compared to the company's revenue, which stood at just Rs 717 crore in FY23. The weight of interest payments from this debt has contributed significantly to the company's ongoing losses.
Additionally, Juniper Hotels faces revenue concentration risks, with a significant portion of its revenue derived from the Grand Hyatt Mumbai and Delhi properties, accounting for 91% of the total revenue.
Despite maintaining a commendable occupancy rate of 74%, which is among the best in the industry. But while other companies with similar occupancy rates are profitable, Juniper Hotels continues to struggle.

Valuations

As per FY23, the company is asking for a market cap-to-sales of 11x. These valuations seem very expensive for a company that has consistently reported losses and hence, we would advise avoiding this IPO.

Issue Details

Issue Opens	21st Feb 2024
Issue Closes	23rd Feb 2024
Price Band	Rs. 342 – Rs. 360
Issue size (Upper Band)	Rs. 1800 Cr
Issue Type	FRESH ISSUE
Market cap (based on upper band)	Rs. 8010 Cr
Sales- March 2023 (Rs./Crs)	717 Cr
Net Profit - March 2023 (Rs./Crs)	-2 Cr
Industry	Hotels
Promoters	ARUN KUMAR SARAF
Lead Manager	JM Financial

Objective of the Issue

Details

Objectives of the Issue – Fresh Issue - Rs. 1800 cr

The Objectives of the Offer are for:
1. Repayment of Borrowings
2. General corporate purposes

List of Shareholders Selling Their Stake

Business Operations

About Company

Juniper Hotels owns and operates multiple hotels such as the Grand Hyatt Mumbai, Azad Delhi and Hyatt Delhi residencies, Hyatt Regency Ahmedabad. The company benefits from a long-standing partnership with Hyatt Hotels Corporation, a globally recognized premier hospitality brand. This partnership spans over 40 years and is unique in India. The company is the only hotel development entity in India with which Hyatt has a strategic investment.The Saraf Group and Two Seas Holdings own 95% of the stake while the rest is owned by Juniper Investments.

The company recently acquired Chartered Hotels Private Ltd which had three hotels. This acquisition added 430 keys to the portfolio of the company taking it to a total of 1836 keys as of 30th September, 2023.

Segment Revenue Breakup

Revenue Breakdown by Segment:
Segment	H1FY24	FY23	FY22	FY21
Room Revenue	45%	45%	38%	34%
Serviced Apartments Revenue	13%	12%	18%	25%
Food, Beverage and Alcohol	32%	30%	30%	25%
Lease Rentals	5%	5%	8%	12%
Other Hospitality services	6%	7%	6%	4%

Financials

Financial Overview

The company’s revenue has grown at 93% over the last two years while the profit of the company has remained negative

The company has a debt of Rs 2253 crore as of 30th September, 2023. This figure has increased as compared to the Rs 1830 crore in FY21.

The EBITDA Margin of the company stands at 36.9% in H1FY24 which has fallen as compared to H1FY23 which stood at 43.7%.

Financial Performance (Rs/crore)

Rs./Crs	Q1FY24	FY 23	FY 22	FY 21
Sales	337	717	344	193
Net Profit	-27	-2	-188	-199