Jungle Camps India Ltd. IPO: Key Details

Jungle Camps India

• Jungle Camps India is coming out with an initial public offering (IPO) of 40,86,400 equity shares in a price band Rs 68-72 per equity share.
• The issue will open on December 10, 2024 and will close on December 12, 2024.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 6.80 times of its face value on the lower side and 7.20 times on the higher side.
• Book running lead manager to the issue is Khambatta Securities.
• Compliance Officer for the issue is Parul Shekhawat.

Profile of the company

Jungle Camps India was founded in 2002 and its first lodge Pench Jungle Camp situated in the natural forested estate, the founding lodge provided an intimate connection with the jungles. This was followed by the launch of Kanha Jungle Camp in 2018. The interim years provided a learning curve to the team. Due to the positive feedback and encouragement from the guests and the trade alike, there were more lodges added to the expansion plan -Tadoba Jungle Camp in 2021 and Rukhad Jungle Camp in 2022.

The company is focused on delivering the luxury with conservation focused camps were set up not only as a business venture but to offer its guests a unique and memorable experience in the most natural and rustic environment. The aim was to offer authentic, responsible and immersive experience to every guest and to showcase the best Indian wildlife and hospitality has to offer.

The company is a conservation focused hospitality group with a collection of four award winning boutique resorts located at prime wildlife and tiger reserves national parks across central India, a highway retreat, a restaurant and many other bespoke travel related experiences. Currently, the company along with its subsidiary companies owns and manages total of 87 room accommodation which includes villa, cottages, deluxe rooms, safari tents etc. along with other infrastructure including banquet halls, meeting rooms, restaurants, bars, cafes, swimming pool, spa facilities and other associated amenities and other facilities. 

Proceed is being used for:

• Meeting capital expenditure for the project development at Sanjay Dubri National Park, Madhya Pradesh.
• Meeting capital expenditure for renovation of existing resort Pench Jungle Camp, at Pench National Park, Madhya Pradesh.
• Investment in its Subsidiary, Madhuvan Hospitality Private Limited (MHPL) in relation to capital expenditure for the project development at Mathura Hotel Project, Mathura, Uttar Pardesh.
• General corporate purposes.

Industry Overview

With a total area of 3,287,263 sq. km extending from the snow-covered Himalayan heights to the tropical rain forests of the south, India has a rich cultural and historical heritage, variety in ecology, terrains and places of natural beauty spread across the country. This provides a significant opportunity to fully exploit the potential of the tourism sector. The government has taken steps to boost investments in facilitate spiritual tourism with states like Uttar Pradesh developing tourist circuits and Uttarakhand and West Bengal enhancing infrastructure for pilgrims. India being one of the most popular travel destinations across the globe has resulted in the Indian tourism and hospitality industry emerging as one of the key drivers of growth among the services sector in India. The tourism industry in India has significant potential considering that Tourism is an important source of foreign exchange in India similar to many other countries.

According to WTTC, India is ranked 10th among 185 countries in terms of travel & tourism’s total contribution to GDP in 2019. According to WTTC, the contribution of India's travel and tourism sector to India's economy was worth $199.6 billion in 2022. The Indian travel and tourism industry is expected to record an annual growth at 7.1% per annum. In WTTC’s Economic Impact 2023 report, India’s Travel and Tourism GDP contribution grew by 5.9%. In 2021, the travel & tourism industry’s contribution to the GDP was $178 billion; this is expected to reach $512 billion by 2028. By 2029, it is expected to account for about 53 million jobs. In India, the industry’s direct contribution to the GDP is expected to record an annual growth rate of 7-9% between 2019 and 2030.

Staycation is seen as an emerging trend were people stay at luxurious hotels to revive themselves of stress in a peaceful getaway. To cater to such needs, major hotel chains such as Marriott International, IHG Hotels & Resorts and Oberoi hotels are introducing staycation offers where guests can choose from a host of curated experiences, within the hotel. India’s travel and tourism industry has huge growth potential. The industry is also looking forward to the expansion of e-Visa scheme, which is expected to double the tourist inflow in India. India's travel and tourism industry has the potential to expand by 2.5% on the back of higher budgetary allocation and low-cost healthcare facility. It is irrefutable that the tourist industry is becoming a more significant economic force and has the potential to be used as a tool for development. The tourist industry not only drives growth, but it also raises people's standards of living with its ability to provide significant amount of diverse employment opportunities. It promotes environmental preservation, champions diverse cultural heritage, and bolsters international peace. By 2028, Indian tourism and hospitality is expected to earn $50.9 billion as visitor exports compared with $28.9 billion in 2018.  

Pros and strengths

Strategic locations: The company has strategically-located all its jungle camps in the vicinity of national parks. Each jungle camp has been meticulously designed to emphasise the pristine nature that surrounds it. Intended for travellers who seek extraordinary in simplicity and luxury in magnificence of nature, it promises a soul-stirring, restorative experience. For the ease of its guests, it has its sales office at New Delhi, and it operates through various online travel agencies.

Focus on guests needs: The company understands that focusing on guests’ needs is paramount for providing exceptional experiences. It tailors services to meet the individual preferences and requirements of each guest by providing them with concierge services, prioritizing their safety and security of guests by implementing robust security measures, such as surveillance cameras, well-lit premises, and secure keycard systems. It encourages guests to provide feedback about their experiences and promptly addresses any issues or concerns that arise during their stay, implement a systematic approach to handling guest feedback, including follow-up procedures to ensure guest satisfaction.

Generation of local employment: The company actively recruits from the local community located around each of its project sites and offers competitive wages, benefits, and incentives to attract and retain local talent. It also purchases local goods and supports local artisans.

Risks and concerns  

Business is cyclical in nature: The company’s revenues and cash flows are affected by seasonality. Its resorts are located at Madhya Pradesh and Maharashtra, and so it is subject to low revenue during varying seasons in this location. In particular, the month of July, August and September include India’s summer and monsoon seasons and international travellers to, and domestic travellers in, India are substantially fewer than in the other month of the year. To the extent this seasonality is not mitigated by a steady volume of business travel, its quarterly results of operations could fluctuate significantly.

Not executed any agreement with any of its Designated Agents: The company’s business operates through multiple channels, including online bookings via its website and third-party platforms, direct bookings from guests at its premises, bookings facilitated by various agents, and collaborations with online travel agents (OTAs) that help reach a broader audience. Additionally, a significant portion of its business is generated through word-of-mouth referrals, which speaks to the quality and reputation of its services. It has its sales office at New Delhi, and it operates through its designated agents at Mumbai, Bangalore, and Pune. It has neither any written agreement nor any commitment with any of them. In absence of any type of the commitment with them, it is not sure whether they will continue to work with it as designated agents at commercially acceptable rates. If, any of the designated agents refuse to work for it, its business will be affected which will adversely affect its profitability and cash flows.

Stiff competition: The resort and hotel industry is high fragmented in nature and subject to growing competition. There is increasing competition in respect of price, location, quality of service/ food etc. A growing, under-served market, such as India, is particularly attractive to new entrants, who may also offer new cuisines and beverages that appeal to customer tastes. It may also face competition from existing resorts and hotels willing to accept low margins on investment in order to enter new market. Further, it generally faces competition from local outlets. A significant increase in competition, whether from one new competitor or many, could exert downward pressure on prices, lower demand of its products and concepts, an inability to take advantage of new business opportunities and a loss of market share, all of which would adversely affect its business, financial condition, results of operations and prospects.

Outlook

Jungle Camps India operates wildlife camps and hotels, motels, inns, guest houses, holiday homes, health clubs, catering houses, and restaurants in India. The company is a conservation-focused hospitality group that operates four award-winning boutique resorts in prime wildlife and tiger reserve national parks across central India. In addition to these resorts, the group manages a highway retreat and a restaurant and offers a variety of customized travel experiences. The company owns and operates 87 rooms, including villas, cottages, deluxe rooms, and safari tents. Its amenities include banquet halls, meeting rooms, restaurants, bars, cafes, swimming pools, and spa facilities. On the concern side, the hospitality industry is affected by consumer preferences and perceptions. Changes in these preferences and perceptions may affect the demand for its properties and adversely affect its operations. Moreover, the company operates in a highly competitive market and may not be able to maintain its market position, which may adversely impact its business, results of operations and financial condition.

The company is coming out with a maiden IPO of 40,86,400 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 68-72 per equity share. The aggregate size of the offer is around Rs 27.79 crore to Rs 29.42 crore based on lower and upper price band respectively. On performance front, the company has reported a rise of 61.01% in total revenue at Rs 1,810.61 lakh in FY24 as compared to Rs 1,124.55 lakh in FY23. Moreover, the company’s net profit surged 699.55% to Rs 359.16 lakh in FY24 as compared to Rs 44.92 lakh in FY23.

The company envisages long term growth by providing qualitative services and building long term relations with customers. In line with this vision, the company is implementing a business strategy with several key components. Its strategy will be to focus on capitalizing on its core strengths and expanding the operations of its business. Moreover, leveraging its market skills and relationships is a continuous process in its organization and the skills that it imparts in its people give importance to customers. It aims to do this by leveraging its market skills and relationships and further enhancing customer satisfaction.