Unveiling the potential: Krystal integrated services IPO analysis

A prominent player in the integrated services sector, Krystal Integrated Services Pvt Ltd, is gearing up for its IPO debut scheduled for March 14, 2024. This market leader has been serving a wide variety of clients from all walks of life for quite some time, thanks to its extensive service offerings. 

Due to the interest it has generated among investors and market watchers, it is one of the most anticipated initial public offerings (IPOs) recently. Stay tuned as this article explores this initial public offering (IPO) in more depth, revealing its implications for prospective investors.

About the IPO

A major market event has occurred with the Krystal Integrated Services IPO. The issue price range for the shares has been set by the company at ₹680-715 per share to raise ₹300.13 crore. A total of 24.47 lakh shares, valued at ₹175 crore, will be issued in the public offering, with 17.5 lakh shares, valued at ₹125.13 crore, being offered for sale.

Mutual funds, banks, insurers, and foreign institutional investors will have the opportunity to subscribe to the anchor book, a portion of the initial public offering (IPO), for one day on March 13.

The issue’s goals are obvious and concentrated. The company intends to use ₹10 crore from the new issue to settle debt, ₹10 crore for new machinery, and ₹100 crore for working capital. Corporate operations will make use of the residual funds.

Bids can be submitted by investors for a minimum of 20 equity shares and after that in increments of 20. Twenty times the lot size plus 680 times the lower price band equals ₹13,600, the minimum investment required by retail investors. The highest bid that can be placed is ₹14,300.

Company overview

After formally incorporating on December 1, 2000, Krystal Integrated Services Limited quickly rose to prominence in India’s integrated facility management service market. The total capitalisation of the company is ₹11.52 Cr, and its authorised share capital is ₹15.00 Cr.

Services such as production support, warehouse management, and airport management are among the many that this organisation offers. Other offerings include a wide range of cleaning and sanitation options, as well as mechanical, electrical, plumbing, landscaping, pest control, and waste management.

Sectors covered:

• Hospitals
• Education
• Banking and financial services
• Public administration
• Airport
• Industrial

Also read: Services sector in India: An insight into India’s engine of growth  

Promoters and management

The promoters of Krystal Integrated Services Limited are:

• Prasad Minesh Lad
• Neeta Prasad Lad
• Saily Prasad Lad
• Shubham Prasad Lad
• Krystal Family Holdings Private Limited 

One of the main Krystal Integrated Services Pvt Ltd owners, Prasad Minesh Lad, is a well-known figure in both the political and business spheres. He has been active in politics for more than 25 years.

The promoters’ mix of commercial savvy and political acumen gives Krystal Integrated Services strong and dynamic leadership, which has helped the company grow and expand in the integrated services industry.

Financial performance

Over the years, Krystal Integrated Services Limited has shown excellent financial performance. 

The company’s financial performance gives the impression that Krystal Integrated Services Limited is heading in the right financial direction. The consistent growth in total income, operating profit, and PAT, coupled with a reduction in total debt, suggests robust financial health and effective management strategies.

Prospective investors should take note of the company’s track record of increasing profitability while decreasing debt. However, as with any investment, potential investors should conduct thorough research and consider all financial aspects before making a decision.

According to the CRISIL rating report, Krystal Integrated Services Limited has maintained its bank loan facilities rating at ‘CRISIL BBB+/Positive’ for the long term and ‘CRISIL A2’ for the short term. 

The ratings are a reflection of the company’s solid financial risk profile, diverse revenue streams, strong customer relationships and extensive experience of the promoters in the industry. 

Strong contracts provide revenue visibility, which, according to CRISIL Ratings, will continue to benefit the group’s business risk profile over the medium term, so the outlook is positive.

Also read: Investing Profits from Side Ventures 

Investment prospects

Strengths

• Extensive experience in the integrated facilities management business.
• Healthy relationships with customers are crucial for customer retention and business growth.
• Moderate financial risk profile, demonstrated by consistent revenue growth and debt reduction.
• Efficient sourcing and adoption of smart technologies, providing a competitive edge.

Risks

• Heavy reliance on competitive government contracts, changes in government policies or loss of these contracts could impact revenue.
• Uncertainty in the success of tenders, adds to the business risk.
• Importance of maintaining customer relationships, any damage to these relationships could affect business.
• Revenue concentration in specific regions makes the company vulnerable to regional economic downturns.
• Workforce-related challenges, such as labour disputes or difficulty in recruiting and retaining skilled workers, pose significant operational and financial risks.

Peer comparison

Also read: Earnings Per Share (EPS): What it means and how to calculate it 

Bottomline

One-of-a-kind investment opportunity presented by Krystal Integrated Services IPO. A compelling selling point is the company’s healthy financial performance, dominant market position, and bright prospects for expansion.

This investment, however, is not without its pitfalls and challenges. So, before making a decision, prospective investors should think carefully about everything and do their research.