Juniper Hotels IPO booked 18% on Day 2 so far; retail book subscribed 74%

The initial public offering (IPO) of Juniper Hotels continued to receive a muted response from the investors during the second day of the bidding process on day one. The issue, which had kicked-off for bidding on Wednesday, February 21, was overall subscribed only 11 per cent on the first day of the bidding.

The Mumbai-based Juniper Hotels is selling its shares in the price band of Rs 342-360 apiece with a lot size of 40 shares and its multiples thereafter. The issue is entirely a fresh sale of up to 5,00,00,000 equity shares. The company is looking to raise a total of Rs 1,800 crore via IPO.

According to the data, the investors made bids for 52,92,800 equity shares, or 18 per cent, compared to the 2,89,47,367 equity shares offered for the subscription by 1.05 pm on Thursday, February 22. The bidding for the issue will conclude on February 23, Friday.

The allocation for retail investors was subscribed 74 per cent, while the portion reserved for non-institutional investors saw a subscription of merely nine per cent. However, the quota set aside for qualified institutional bidders (QIBs) attracted bids for only four per cent as of the same time.

Juniper Hotels, which was Incorporated in September 1985, is a luxury hotel development and ownership company. It operates seven hotels and serviced apartments with a total of 1,836 rooms as of September 30, 2023, It has hotels and serviced apartments in Mumbai, Delhi, Ahmedabad, Lucknow, Raipur, and Hampi in the luxury, upper upscale and upscale categories.

The grey market premium of Juniper Hotels has taken a big hit as the company is commanding a premium of merely Rs 5 in the unofficial market which was around Rs 10 earlier. However, the premium in the grey market has been signaling muted-to-dull listing pop for the investors.

Brokerage firms have a mixed view on the stock. A few analysts have suggested subscribing to the issue citing the unfolding of opportunities on the back of improved efficiencies, acquisitions and expansion plans. However, others are suggested to give the IPO a skip due to mounting debt, loss-making nature and asset-heavy model of the business.

Juniper Hotels reported total revenue of Rs 337.43 crore in H1FY24 along with Ebitda of Rs 124.59 crore. The company’s inventory grew 30.58 per cent YoY in H1FY24, said SMIFS. In FY23 the company’s net sales grew 116.03 per cent YoY along with EBITDA growth of 217.70 per cent YoY, it said.

"As the recent capacity additions start to contribute we expect the earnings to register decent growth, add to that at par valuations and the premium category tag - offering scope for increasing occupancy and ARR improvements could lead to very strong growth in the bottomline, recommend to subscribe as a good long term investment," SMIFS added.

Ahead of its IPO, Juniper Hotels has allocated 2.25 crore equity shares at Rs 360 apiece to garnered Rs 810 crore from anchor investors. The company has reserved 75 per cent of the offer to qualified institutional bidders (QIBs), with non-institutional investors receiving 15 per cent, and the remaining 10 per cent allocated to retail investors.

Chola Securities, which has given it a subscribe rating, is positive on the issue citing its established legacy, strategic alliances, strong portfolio, operational efficiency, growth and expansion plans, effective and experienced leadership and robust revenue growth.

However, the brokerage has flagged historical losses, delays in loan repayment, mounting burden of debt, dependence on select properties for revenue and season-cyclical vulnerabilities as the key risks and concerns for Juniper Hotels.

CLSA India, JM Financial and ICICI Securities are the book running lead managers of the Juniper Hotels IPO, while Kfin Technologies is the registrar for the issue. Shares of the company are set to be listed on Wednesday, February 28 on both BSE and NSE.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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