Juniper Hotels Ltd, operating under the Hyatt brand, submitted preliminary papers to the Securities and Exchange Board of India (SEBI) on Friday. The company aims to raise ₹1,800 crore through an initial public offering (IPO), according to its draft red herring prospectus (DRHP). The IPO will consist of a fresh issue of equity shares without an Offer for Sale (OFS) component.
The hotel operator is co-owned by Saraf Hotels Limited and Two Seas Holdings Limited, an affiliate of global hospitality company Hyatt Hotels (NYSE:H) Corporation. As of June 30, 2023, Juniper Hotels owned 20% of the total 1,836 Hyatt-affiliated hotel rooms in India. The company manages seven hotels and serviced apartments in cities including Mumbai, Delhi, Ahmedabad, Lucknow, Raipur, and Hampi.
According to InvestingPro, Juniper Hotels has been a strong player in the Construction and engineering industry and has consistently increased its earnings per share. The company has also maintained dividend payments for 16 consecutive years, demonstrating a strong financial position. For more insights such as these, consider checking out the InvestingPro Tips that are available with their subscription service.
The IPO will be conducted through a book-building process. Not less than 75% of the issue will be available for allocation on a proportionate basis to qualified institutional buyers. Up to 15% will be allocated to non-institutional investors and up to 10% to retail individual investors.
In consultation with the lead bankers on the issue, Juniper Hotels may consider issuing additional equity shares on a private placement for cash consideration aggregating up to ₹350 crore pre-IPO. If this placement is completed, the size of the fresh issue will be reduced accordingly.
The company intends to use net proceeds of ₹1,500 crore towards repayment, prepayment, or redemption of certain outstanding borrowings. The funds will also be used for general corporate purposes.
For FY23, Juniper Hotels reported that its revenue from operations more than doubled to ₹666.85 crore from ₹308.69 crore in the last fiscal year. Its net loss narrowed to ₹1.5 crore in FY23 from ₹188.03 crore in FY22. These figures align with InvestingPro's data, which indicates that the company's revenue growth has been slowing down recently, and it operates with a moderate level of debt.
The book-running lead managers for the IPO are JM Financial Limited, CLSA India Private Limited, and ICICI Securities Limited. KFin Technologies Limited is the registrar of the offer. The company's equity shares are proposed to be listed on the BSE and NSE.
Earlier this month, it was reported that Hyatt Hotels in India, which includes Juniper Hotels' portfolio, intends to increase its total number of hotels from 43 to 50 before the end of the year. This expansion aligns with InvestingPro's analysis, which shows that Juniper Hotels has seen a large price uptick over the last six months and a strong return over the last five years.
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