Facilities management services provider Krystal Integrated Services is likely to debut with moderate gains on March 21, partly backed by the decent IPO subscription numbers and financial performance. But the volatility and subdued market sentiment may limit the upside, experts said.
The benchmark indices corrected three percent from its record high seen last week.
The Rs 300-crore public issue saw a subscription of 13.21 times during March 14-18, with non-institutional investors providing the major support to the issue as they bought 43.91 times the allotted quota. Qualified institutional buyers picked 7.33 times the portion set aside for them and retail investors bid 3.32 times the reserved portion.
"We expect a muted listing at around Rs 740-750 per share, resulting in a listing gain of around 4 percent over the issue price of Rs 715 per share," Amit Goel, Co-Founder and Chief Global Strategist at Pace 360 said.
However, based on their annual earnings for the fiscal year ending 2024, the initial public offering (IPO) seems fairly valued, he feels.
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Krystal Integrated Services is a prominent provider of integrated facilities management services. The business provides bunch of services such as housekeeping, sanitation, catering, private security, manned guarding, payroll processing, and staffing, and electrical and plumbing.
With its integrated facilities management services, the company is preferred partner in government projects as its government projects business accounts for more than 70 percent of total revenue. They've also shown steady growth in both profits and revenue over recent reporting periods.
Consolidated net profit during the financial year ended March FY23 grew by 47 percent to Rs 38.4 crore and revenue from operations increased by 28 percent to Rs 707.6 crore compared to previous year. Net profit in the six months period ended September FY24 stood at Rs 20.5 crore on revenue of Rs 451.6 crore.
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Even in the grey market, Krystal Integrated Services IPO shares are not attracting great interest from participants, trading at around 5 percent premium, the market observers said. The grey market is an unofficial market wherein IPO shares can be bought and sold till the listing.
According to Parth Shah, research analyst at StoxBox, the company is expected to list with a premium of approximately five percent above its issue price.
Krystal operates on a B2B model and due to its wide range of service offerings the company delivers a range of customized solutions suited to the specific needs of its customers, which bolsters customer acquisition and retention capabilities.
The overall outsourced integrated facility management market in India is expected to grow at a CAGR of 14.6 percent during FY23-FY28. Public administration, industrial, commercial offices, healthcare, educational institutions, railways, and metro, and airport sectors are the top end user segments which are anticipated to drive the demand for integrated facility management, thereby benefiting the company in the longer run, Parth said.
The Krystal Integrated Services IPO was a mix of fresh issuance of shares worth Rs 175 crore, and an offer-for-sale (OFS) of 17.5 lakh shares worth Rs 125.13 crore by promoter Krystal Family Holdings. The price band for the public issue was Rs 680-715 per share.
The company will spend Rs 100 crore out of the net fresh issue proceeds for its working capital requirements. Further, Rs 10 crore each will be used for repaying debts and purchase of new machinery. And the remaining fresh issue money will be utilise for general corporate purposes.
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