PKH Ventures is the last initial public offering to be launched in June 2023, after IKIO Lighting, HMA Agro Industries, IdeaForge Technology, and Cyient DLM IPOs.
Here are 10 key things that you should know about the public issue:
1) IPO Dates
The offer opens for subscription on June 30 and the last day to bid for shares would be July 4.
2) Price Band
The Mumbai-based construction and development company has fixed the issue price band at Rs 140-148 per share.
3) IPO Size
The maiden public issue of 2.56 crore equity shares comprises a fresh issue of 1.82 crore shares and an offer-for-sale of 73.73 lakh shares by promoter Pravin Kumar Agarwal.
The total fund raising through the offer would be Rs 379.35 crore at the upper price band.
4) Objectives of the Issue
The offer-for-sale issue money will go to selling shareholder Pravin Kumar Agarwal, while the company will receive funds only from fresh issue.
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The net proceeds of the fresh issue will be used for investment in subsidiary, Halaipani Hydro Project Private Limited for the development of hydro power project including civil construction and electromechanical works (Rs 124.11 crore).
Investment in Garuda Construction's project for its long-term working capital requirements (Rs 80 crore), and acquisitions and other strategic initiatives (Rs 40 crore) are other objectives of the issue, besides general corporate purposes. Garuda Construction is a subsidiary of the company.
5) Lot Size
Investors can bid for a minimum of 100 equity shares in the IPO, and in multiples of 100 shares thereafter. Hence, the minimum investment by retail investors in the IPO would be Rs 14,800 per lot and Rs 1,92,400 (for 13 lots) would be the maximum, as up to Rs 2 lakh investment is allowed in the retail category.
High networth individuals, who are allowed to invest up to Rs 10 lakh, can bid for a minimum of 14 lots worth Rs 2,07,200 and their maximum investment would be Rs 9,91,600 for 67 lots.
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Half the issue size is reserved for qualified institutional investors, 15 percent for high networth individuals (non-institutional investors) and the rest 35 percent for retail investors.
6) Company Profile
Incorporated in 2000, PKH Ventures operates in three business verticals - construction and development, hospitality, and management services. The civil construction business is operated by subsidiary Garuda Construction, which was incorporated in 2010.
Garuda Construction is engaged in the civil construction of six residential projects for third-party developers and promoter group in the MMR. As of March 15, 2023, its third-party developer order book stood at Rs 468.3 crore.
Hospitality vertical is in the business of owning, managing and operating hotels, restaurants, QSRs, spas and sale of food products. It operates luxurious resort at Aamby Valley, Lonavala.
PKH has two government projects (development of a 16 MW hydropower plant in Arunachal Pradesh, and 42.42 acres entertainment centre in Nagpur) and three government hotel development projects.
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The company is also proposing to develop several projects, including real estate developments in Punjab and Mumbai; agro processing cluster in Rajasthan; cold storage park/facilities in Madhya Pradesh; and a wellness centre and resort in Maharashtra (Chiplun).
PKH also owns cricket team NaMo Bandra Blasters in the T20 Mumbai League of the Mumbai Cricket Association.
7) Financials
The real estate construction company has recorded profit of Rs 40.51 crore for the year ended March 2022, growing 32.5 percent over the previous year, despite lower revenue growth, driven by other income and operating margin.
Revenue from operations for FY22 at Rs 199.35 crore fell by 17.5 percent compared to previous year. On the operating front, EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 4.8 percent to Rs 53 crore and margin expanded by 566 bps to 26.57 percent in the same period.
Profit for nine-month period ended December FY23 stood at Rs 28.63 crore on revenue of Rs 125.5 crore.
8) Promoters
PKH Ventures is 100 percent owned by promtoer and promoter group. Pravin Kumar Agarwal, Chairman and Managing Director, holds 63.69 percent shareholding in the company as of now, while Ayesspea Holdings, and Deepa Travel, which are part of promoter group, have 30.92 percent and 5.38 percent stake respectively in the company.
Kingston Eric Mendes is the Executive Director on the board, and Ram Niranjan Bhutra is the non-executive director, while Venkateshkumar K Tirupatipanyam, Priyanka Yadav, and Rajvirendra Singh Rajpurohit are independent directors.
Clifford D’Souza is the Chief Executive Officer of the company, while Neelam Prakash Sharma is the Chief Financial Officer, and Vruti Choksi is the Company Secretary and Compliance Officer of the firm.
9) Risks and Concerns
Here are key risks and concerns highlighted by HDFC Securities in its note:
a) The company has no experience of developing and operating a hydro power plant
b) Any environmental risks may lead to damage or destruction, partial or full, of the hydro power project
b) PKH receives significant revenues from the construction & development vertical.
c) Increase in the prices of construction materials, fuel, labour and equipment may affect business.
d) Reliance on third parties for civil construction activities
10) Listing Date and GMP
The IPO basis of allotment will be finalised July 7 and the equity shares will be credited to demat accounts of eligible investors by July 11. Refunds will be transferred to unsuccessful investors by July 10.
PKH Ventures will make its debut on the BSE and NSE on July 12.
The IPO shares enjoy a premium of around 4-9 percent in the grey market, analysts on anonymity said. The grey market is an unofficial trading platform for IPO shares.
IDBI Capital Markets & Securities is the only lead manager to the issue, while Link Intime India is the registrar to the offer.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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