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Juniper Hotels, which operates hotels under the 'Hyatt' brand, has initiated the process of raising Rs 1,800 crore (approximately $240 million) through an Initial Public Offering (IPO). The company submitted preliminary papers to the Securities and Exchange Board of India (SEBI), the country's capital market regulator, signalling its intent to go public.
This IPO will consist entirely of fresh equity shares, as stated in the Draft Red Herring Prospectus (DRHP). Moreover, the hotel chain is exploring a pre-IPO placement round to secure up to Rs 350 crore. Should this pre-IPO placement be successful, it could lead to a reduction in the size of the fresh equity issue.
The primary objective for raising these funds, as disclosed in the DRHP, is to utilize the net proceeds of approximately Rs 1,500 crore to settle existing debts. The remaining funds will be allocated for general corporate purposes.
Juniper Hotels is co-owned by Saraf Hotels Ltd and Two Seas Holdings Ltd, an affiliate of the global hospitality giant Hyatt Hotels Corporation. This partnership has positioned the company as a significant player in the Indian hospitality sector.
Juniper Hotels manages a portfolio of seven hotels and serviced apartments, providing a total of 1,836 keys to guests across various hotel categories, including luxury, upper upscale, and upscale. Its diverse offering caters to the evolving preferences of travellers in India.
As of the latest available ownership data, Saraf Hotels owns a 44.68 percent stake in Juniper Hotels, Two Seas Holdings holds 50 percent, and Juniper Investments has a 5.32 percent shareholding. This cooperative ownership structure brings together a wealth of experience and expertise in the hospitality industry.
In terms of financial performance, Juniper Hotels has shown substantial growth. For the fiscal year 2023, the company's revenue from operations more than doubled, reaching Rs 666.85 crore, compared to Rs 308.69 crore in the previous year. Notably, the company's net loss also narrowed significantly, decreasing to Rs 1.5 crore from Rs 188.03 crore.
To facilitate the IPO process, JM Financial, CLSA India, and ICICI Securities Limited have been appointed as the book-running lead managers. The equity shares issued through the IPO will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), providing investors with opportunities to trade these shares on these reputable platforms.
India's hospitality sector has witnessed considerable growth in recent years, driven by factors such as increased domestic and international travel, expanding middle-class demographics, and rising disposable incomes. The COVID-19 pandemic briefly disrupted the industry, but there are signs of a robust recovery as travel restrictions ease and consumer confidence rebounds.
Juniper Hotels' decision to tap into the capital market aligns with the long-term potential of the Indian hospitality industry. As the economy continues to grow and the country attracts a growing number of tourists and business travellers, the demand for high-quality accommodation options is expected to rise. In this context, Juniper Hotels' IPO is a testament to its commitment to providing world-class hospitality experiences in India.
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