Juniper Hotels lists at Rs 365 against issue price of Rs 360

Juniper Hotels made a quiet debut on the bourses on Wednesday, listing at Rs 365 -- a 1.4 per cent premium over its issue price of Rs 360 per share on the National Stock Exchange (NSE).

The stock of the hotels & resorts company opened at Rs 361.20 on the BSE. Post listing, the stock moved up to Rs 383.85, nearly 7 per cent higher over its issue price. At 10:03 AM, it was quoting at Rs 381.05, a 6 per cent premium against its issue price on the BSE. A combined 6 million equity shares have changed hands on the NSE and BSE thus far in trades.

"Juniper Hotels' listing performance aligns with pre-listing expectations, which were tempered by muted investor enthusiasm and a lack of significant gray market premium (GMP). The saturated hospitality sector raises concerns about Juniper's ability to maintain its market share amidst fierce competition. While Juniper boasts a well-established presence, its recent financial performance has not been particularly strong, potentially deterring investors. Thus, considering all these factors, a cautious approach is crucial for investors," said Shivani Nyati, Head of Wealth at Swastika Investmart.

Juniper Hotels is a strategic partnership between the Saraf group, a hotel developer and Hyatt, a premier international hospitality company. The issue was subscribed 2.2 times. The portion for non-institutional investors was subscribed 0.89 times, the quota for Retail Individual Investors (RIIs) was subscribed 1.31 times, and the category for Qualified Institutional Buyers (QIBs) received 3.11 times subscription.

Juniper Hotels is a luxury hotel development and ownership company with the largest no. of rooms inventory of Hyatt affiliated hotel rooms in India (19.6 per cent). Going forward, the company has set a robust expansion plan with focus on increasing its average room rates (ARRs), which will be done by enhancing their existing assets, and development of new opportunities (development of commercial space).

Additionally, the funds raised through the issue will go on to reduce the debt of the company substantially, which in turn might make the company profitable over the medium term. 

"Apart from that, the demand growth for hotels rooms is expected to outpace the supply growth of hotel rooms. Therefore, robust expansion plan ahead, better profitability due to lower debt, and positive industry factors make this IPO an attractive proposition," analysts at Indsec Securities and Finance said.

The company is planning to expand its Grand Hyatt Mumbai hotel with 293 additional rooms and 24 serviced apartments within the next three years (by FY27). This expansion will contribute to the company's revenue growth. The MICE (Meetings, Incentives, Conferences, and Exhibitions) area of Grand Hyatt Mumbai will also be increased from 50,000 sq.ft to 100,000 sq.ft, which is expected to be operational from H1FY25, brokerage firm SBI Securities said.