The Juniper Hotels IPO closed with 2.08 times subscription on the final day of bidding (February 23) as investors bought 6.01 crore equity shares against the offer size of 2.89 crore equity shares.
Qualified institutional investors (QIIs) were ahead among the participants, picking 2.96 times the allotted quota and retail investors bought 1.28 times the portion set aside for them, while the part of non-institutional investors was booked 0.85 times, as per the subscription data available with the exchanges.
The Mumbai-based luxury hotel development and ownership company opened its maiden public issue of Rs 1,800 crore on February 21 with a price band of Rs 342-360 per share.
The book-built IPO comprises only a fresh issue by the company with no offer-for-sale (OFS) component.
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Juniper Hotels with a portfolio of seven hotels and serviced apartments with a total of 1,836 rooms will spend Rs 1,500 crore of the issue proceeds for repaying debts. The remaining amount will be used for general corporate purposes and issue expenses.
Post issue, the debt burden of the company will reduce considerably, as it had outstanding borrowings of Rs 2,252.75 crore as of September 2023, increasing from Rs 2,045.6 crore as of March 2023.
The hotel developer Saraf Group and global premier hospitality brand Hyatt Hotels Corporation-owned company operate its hotels and serviced apartments under three distinct segments namely luxury (the Grand Hyatt Mumbai Hotel and Residences and Andaz Delhi), upper upscale (the Hyatt Delhi Residences, Hyatt Regency Ahmedabad, Hyatt Regency Lucknow and Hyatt Raipur; and upscale (Hyatt Place Hampi).
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Juniper Hotels competes with listed peers like Indian Hotels Company, EIH, Lemon Tree Hotels, and Chalet Hotels, which all have higher revenue from operations compared to Juniper.
It has been a loss-making company, though the losses reduced considerably in the year ended March FY23 at Rs 1.5 crore from a loss of Rs 188 crore in FY22, which may be one of the reasons for the muted response to the public issue, revenue from operations more than doubled to Rs 666.85 crore against Rs 308.7 crore during the same period.
Further, the losses in the six months ended September FY24 increased to Rs 26.5 crore from Rs 17.5 crore in the same period previous fiscal, though there has been growth in revenue from operations rising to Rs 336.1 crore from Rs 294.3 crore during the same period.
Meanwhile, Juniper Hotels will finalise the basis of allotment of IPO shares by February 26 and its equity shares will be credited to demat accounts of successful investors by February 27.
Its equity shares will be available for trading on the bourses with effect from February 28.
In the grey market, its IPO shares are not attracting any major premium, which may be due to the loss-making status and muted subscription though there will be a significant reduction in debt burden post issue, market observers said. The grey market is an unofficial platform for trading in IPO shares till the listing.
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