Krystal Integrated Services IPO: 10 things to know before subscribing to Rs 300-crore issue

Krystal Integrated Services IPO: The issue will open for subscription on March 14 and close on March 18, 2024

Facilities management services company Krystal Integrated Services’ IPO is set to open on March 14. The public offer comprises a fresh issue of 24.47 lakh shares and an offer-for-sale of 17.5 lakh shares.

Here are 10 key things to know before subscribing to the offer:

1) IPO Dates

The IPO will open for subscription on March 14 and close on March 18, 2024.

2) Price Band

The price band for the issue has been fixed at Rs 680-715 per share.

3) Offer Details

Krystal Integrated Services plans to raise Rs 300.13 crore. The public offer comprises a fresh issue of 24.47 lakh shares worth Rs 175 crore and an offer-for-sale of 17.5 lakh shares worth Rs 125.13 crore. The anchor book opened for a day on March 13.

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4) Objectives of Issue

The company will spend Rs 10 crore out of the fresh issue funds for repaying debts, another Rs 10 crore for the purchase of new machinery, and Rs 100 crore for its working capital requirements. The remaining funds will be used for general corporate purposes.

5) Lot Size

Investors can bid for a minimum of 20 equity shares and multiples of 20 after that. Hence, the minimum investment by retail investors would be Rs 13,600 (20 (Lot size) x 680 (lower price band)). At the upper end, the bidding amount will increase to Rs 14,300.

6) Company Profile

Krystal Integrated Services offers soft services such as housekeeping, sanitation, landscaping, gardening, mechanical, electrical and plumbing services, waste management, pest control, façade cleaning, and other services such as production support, warehouse management, and airport management. The company also offers staffing, payroll management, private security, manned guarding, and catering service.

As of September 30, 2023, the company provided services to 135 hospitals and medical colleges, 228 schools and colleges (other than medical colleges), one airport, four railway stations, and 30 metro stations, and catering services on certain trains.

7) Financials

Krystal Integrated Services which operates on a B2B model clocked 46.3 percent on-year growth in net profit at Rs 38.4 crore for the financial year ended March 2023, with revenue from operations growing 28 percent to Rs 707.6 crore during the same period.

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Its EBITDA (earnings before interest, tax, depreciation and amortisation) during the same period increased by 19.9 percent to Rs 54.5 crore with a margin expansion of 7.7 percent year-on-year.

Further, net profit during the six months ended September FY24 stood at Rs 20.5 crore on revenue of Rs 451.6 crore. Net debt stood at Rs 69.2 crore in the same period. Krystal competes with listed entities like Quess Corp, SIS and Updater Services.

8) BRLMs and Promoters

The book-running lead manager of the IPO is Inga Ventures while Link Intime India is the registrar. The company's promoters are Prasad Minesh Lad, Neeta Prasad Lad, Saily Prasad Lad, Shubham Prasad Lad and Krystal Family Holdings. Prasad Lad is a Member of the Legislative Council (MLC) and BJP’s state vice-president of Maharashtra.

9) Risks

(i) The revenue from operations is highly dependent upon a limited number of customers, with the largest, top five, top 10 and top 20 customers contributing to 34.91 percent, 59.19 percent, 72.58 percent and 85.86 percent respectively, of revenue from operations for fiscal 2023.

(ii) A significant part of the revenue is generated from government contracts obtained through a competitive bidding process, which contributed to 73.66 percent of total revenue from operations for fiscal 2023.

(iii) As of September 30, 2023, the net debt stood at Rs 69.2 crore.

10) Listing Date

The basis of allotment will be finalised by March 19, shares will be credited to demat accounts by March 20 and the stock is expected to be listed on the NSE and BSE on March 21, as per the RHP.