Juniper Hotels IPO: 10 Key Things to Know from RHP

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Hotels player Juniper Hotels is aiming to launch its IPO next week. It aims to mobilize INR 1,800 crores through Fresh Issue by existing investors. Here are the 10 things to know from RHP Juniper Hotels IPO.

#1 Juniper Hotels IPO: A Unique Model Involving Hyatt

Juniper Hotels is a luxury hotel development and ownership company, co-owned by Saraf Hotels Limited and Two Seas Holdings Limited, an affiliate of the prominent global hospitality entity, Hyatt Hotels Corporation. The partnership is unique, with Hyatt owning 50% of Juniper Hotels through Two Seas Holdings.

As of 30 September 2023, the company holds the distinction of being the largest owner of ‘Hyatt-affiliated hotels in India based on the number of keys. With a portfolio comprising seven hotels and serviced apartments, it currently operates a total of 1,836 keys as of the same date.

Juniper Hotels

Juniper Hotels stands as the sole hotel development company in India with a strategic investment from Hyatt. As of 30 September 2023, it holds a 19.6% ownership stake in Hyatt group-affiliated hotel rooms and apartments in India. Leveraging its profound expertise, Juniper Hotels excels in recognizing opportunities within hospitality destinations, crafting upscale hotels in these locales, and fostering their growth through diligent asset management.

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#2 Juniper Hotels IPO: Upscale Hotels in Business Districts

The hotels and serviced apartments span across luxury, upper upscale, and upscale categories, forming iconic landmarks in Mumbai, Delhi, Ahmedabad, Lucknow, Raipur, and Hampi. Notably, the Grand Hyatt Mumbai Hotel and Residences stands as the largest luxury hotel in India. Additionally, the Hyatt Regency Lucknow and Hyatt Regency Ahmedabad are the largest upper upscale hotels in their respective markets, while Hyatt Raipur holds the distinction of being the sole upper upscale hotel in Raipur.

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#3 Juniper Hotels: Long-standing Partnership

The Saraf Group and Hyatt have nurtured a strong relationship spanning over four decades, originating from the inauguration of India’s inaugural Hyatt hotel, the Hyatt Regency in Delhi, in 1982. This enduring partnership underscores a shared vision, mutual values, and a harmonized work culture, which are believed to be instrumental in the company’s success, reflected in its robust EBITDA margins.

As of 30 September 2023, the Saraf Group has spearheaded the development of 12 hotels and serviced apartments, encompassing nine cities. Presently, it retains ownership of 11 hotels and serviced apartments, totaling 2,936 keys, strategically positioned across significant locales in India and Nepal.

#4 Juniper Hotels: Industry Outlook

In Fiscal 2022, India ranked as the world’s fifth largest economy, boasting a GDP of USD 3.18 trillion at current prices. According to the International Monetary Fund’s World Economic Outlook Report from October 2023, India’s per capita GDP is projected to witness a compound annual growth rate (CAGR) of 8.3% between Fiscal 2023 and Fiscal 2028, with the country anticipated to lead in GDP growth in the coming years.

Apart from robust economic expansion, the Indian hotel industry stands to benefit from factors such as population growth and rising individual incomes. Projections suggest that the average annual household disposable income will soar to approximately INR 2 million at 2020-2021 price levels. This anticipated growth is poised to fuel significant demand for upper-tier hotels across India.

Moreover, according to the Horwath Report, a mere 0.5% rise in hotel occupancy during domestic travel could result in a 70% occupancy rate for around 50,000 new rooms.

#5 Juniper Hotels IPO: Offer Details

The Juniper Hotels IPO is scheduled to open for subscription between 21 and 23 February 2024. The IPO consists of a Fresh issue of valuing the offering INR 1,800 crore. It is worth highlighting that the company will not get any funds from IPO proceeds as it is totally a fresh issue. The retail investors are allotted 10% of the shares. The IPO will be listed on both BSE and NSE.

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#6 Juniper Hotels IPO: Objects of the Issue

The net proceeds of the Issue, i.e., gross proceeds of the Issue less the Issue-related expenses (‘Net Proceeds’) are proposed to be utilized in the following manner:

  • Repayment/ prepayment/ redemption, in full or in part, of certain outstanding borrowings availed by the company and its recent acquisitions, namely Chartered Hotels Private Limited (CHPL) and Chartered Hampi Hotels Private Limited (CHHPL) – INR 1,500 crore
  • General corporate purposes

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ANDAZ Dehhi

#7 Juniper Hotels IPO: Increasing Occupancy And Premiumization

As evident from the table below, the company has consistently enhanced its occupancy rates. As of 30 September 2023, the average occupancy across all hotels and serviced apartments reached 74.84%, marking an increase from previous years.

Likewise, the company is prioritizing the enhancement of its current hotels by making additional investments. Consequently, it has experienced a significant rise in the Average Room Rate (ARR). The ARR for the most recent reporting period was INR 10,140, marking an 80% increase since 2021.

Details of its Operational Key Performance Indicators (KPIs) as of and for the six months ended 30 September 2023, as well as for the fiscal years 2023, 2022, and 2021:

KPIUnitsFY 2021FY 2022FY 2023H1 FY 2024
Inventory/ KeysNumber1,4061,4061,4061,836
Number of hotels and serviced apartmentsNumber4447
Average room rateINR5,656.776,221.989,875.1210,139.85
Average occupancy%34.2353.7675.7474.84

#8 Juniper Hotels IPO: Employees

Hospitality revolves around the guest experience, where the competence and efficiency of the hotel staff play a crucial role. At Juniper Hotels, each property is equipped with a dedicated human resources team, supported by area and regional assistance. Training programs are tailored to individual hotels, and overseen by designated personnel. As of 30 September 2023, the company employed a total of 1,631 permanent staff, while the CHPL Group had 362 permanent employees.

#9 Juniper Hotels IPO: Financial Performance and Valuations

 FY 2021FY 2022FY 2023H1 FY 2024
Revenue166.35308.69666.85336.11
Expenses462.26557.86742.81383.97
Net income(199.49)(188.03)(1.50)(26.50)
Margin (%)(119.92)(60.91)(0.22)(7.88)
Figures in INR Crores unless specified otherwise
FY 2021FY 2022FY 2023
EPS(13.88)(13.08)(0.10)
PE ratio
RONW (%)(36.68)(52.76)(0.42)
NAV37.8524.8024.67
ROCE (%)(5.23)(3.30)
EBITDA (%)11.5129.5244.94
Debt/Equity1.721.930.86

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#10 Juniper Hotels IPO: Shareholding Pattern

As of February 2024, the company has eight shareholders. Among them, Amit Saraf, Rashmi Saraf, Damodar Tiwari, Bimal Kumar Jhunjhunwala, and T.N. Thanikachalam hold 1 equity share each on behalf of and as nominees of Saraf Hotels Limited.

Below are the details of shareholders holding 1% or more of the paid-up share capital of the company.

Shareholder NameNo. of Shares% of the pre-issue Equity
Share Capital
Saraf Hotels Limited77,079,38144.68
Two Seas Holdings Limited86,251,19250.00
Juniper Investments Limited9,171,8115.32

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