Krystal Integrated Services Ltd IPO Review
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Krystal Integrated Services Ltd IPO

Krystal Integrated Services Limited’s IPO consists of a fresh issue of shares worth INR 175 crores and an offer to sell 17,50,000 lakh existing equity shares. The company seeks funds to repay the borrowings, to meet the working capital requirement, and to finance the purchase of new machinery.

Krystal Integrated Services IPO – Important Details

Krystal Integrated Services IPO DateMarch 14, 2024 to March 18, 2024
Krystal Integrated Services IPO Listing DateMarch 21, 2024
Krystal Integrated Services IPO PriceINR 680-715
Krystal Integrated Services IPO Lot Size20 shares
Krystal Integrated Services IPO Total Issue SizeINR 300.13 crores
Krystal Integrated Services IPO Basis of AllotmentMarch 19,2024
Krystal Integrated Services IPO Initiation of RefundsMarch 20,2024
Krystal Integrated Services IPO Credit of Shares to DematMarch 20,2024
Krystal Integrated Services IPO Issue TypeBook Built Issue
Krystal Integrated Services IPO Listing AtBSE,NSE

Krystal Integrated Services Ltd IPO – Company Profile

Krystal Integrated Services is one of India’s leading integrated facilities management services companies, with a focus on healthcare, education, public administration (state government entities, municipal bodies, and other government offices), airports, railways and metro infrastructure, and retail sectors.

The company’s range of service offerings includes soft services such as housekeeping, sanitation, landscaping, and gardening; hard services such as mechanical, electrical, and plumbing services. Solid, liquid, and biomedical waste management, pest control and façade cleaning and other services such as production support, warehouse management and airport management services.

Krystal Integrated Services Limited IPO  – Fundamental Analysis

Krystal Integrated Services’ financials leading up to its IPO reveal steady revenue growth, increasing profitability, and enhanced financial health, positioning it as a promising investment in the services sector with a solid track record of operational efficiency and financial management.

Revenue Growth:

The company has shown steady revenue growth, from ₹4,743.09 million in FY2021 to ₹7,109.65 million in FY2023, indicating an expanding market presence and operational scalability.

Equity Fluctuations:

Equity levels returned to their FY2021 figure in FY2023 after an increase in FY2022. This unusual pattern warrants further investigation but might reflect capital restructuring or dividend payments.

Profitability:

Profit after tax has seen a considerable increase, highlighting the company’s improving operational efficiency and growing profitability, which is promising for potential investors.

Return on Net Worth (RoNW):

The RoNW has significantly improved, indicating efficient use of equity in generating profits. The increase to 23.53% in FY2023 demonstrates strong financial performance.

Diluted EPS:

The substantial rise in diluted EPS reflects growing earnings power per share, an attractive trait for investors, showcasing the company’s profitability on a per-share basis.

Asset and Liability Management:

While total assets slightly decreased in FY2023 compared to FY2022, the significant reduction in total liabilities during the same period suggests improved financial stability and effective debt management.

Debt-Equity Ratio:

The debt-to-equity ratio has consistently improved, indicating a healthier balance sheet with reduced leverage, which reduces financial risk for the company and its investors.

Krystal Integrated Services IPO Financial Information

ParticularAs of 31 March 2021As of 31 March 2022As of 31 March 2023
Revenue (₹ in millions)4,743.095,548.577,109.65
Equity (₹ in millions)1,360.751,638.551,360.75
Expenses (₹ in Million)4,648.875,277.516,719.49
Profit and Loss After Tax (₹ in millions)168.24262.74384.44
RoNW (%)12.3716.0423.53
Diluted EPS only (₹)14.4522.6933.33
NAV per Equity Share (₹)236.15284.36283.59
Total Assets (in millions)3,384.704,043.853,434.68
Total Liabilities (in millions) 2,023.952,405.301,800.56
Debt-Equity Ratio0.500.450.31

Krystal Integrated Services Limited IPO Peer Comparison

Krystal Integrated Services Limited, with total income of ₹7,109.65 million and an impressive RoNW of 23.53%, stands out for its high EPS and NAV, showcasing stronger profitability and operational efficiency compared to larger peers Quess Corp and SIS Limited.

CompanyTotal Income (₹ in millions)Face Value (₹)P/E Ratio (Times)EPS (Basic) (₹)EPS (Diluted) (₹)RoNW (%)NAV per Equity Share (Basic) (₹)
Krystal Integrated Services Limited7,109.65 10NA33.3333.3323.53%283.59
Quess Corp Limited1,71,583.871030.0615.1615.048.74%173.43
SIS Limited 1,13,457.80518.5423.6423.4314.85%159.23

Krystal Integrated Services Ltd IPO Objective

The main objectives of Krystal Integrated Services Limited’s IPO are to repay borrowings (INR 10 crores), fund working capital needs (INR 100 crores), and purchase machinery to enhance quality and efficiency (INR 10 crores).

  1. Repayment of borrowings: The company wants to repay certain borrowings in full or in part and for the said purpose the company plans to utilise INR 10 crores for the funds raised. 
  1. Funding working capital requirements: The company plans to utilise INR 100 crores to meet future working capital requirements. 
  1. Funding the purchase of machinery:  The Company proposes to purchase new machinery with the objective of improving the quality and efficiency of the deliverables to the customers. The proposed capital expenditure for the purchase of new machinery is expected to have a positive impact on the ability to compete in the market. The company plans to utilise INR 10 crores for the said purpose. 

Krystal Integrated Services IPO Risks And Challenges

Krystal Integrated Services’ faces risks from reliance on competitive government contracts, uncertain tender success, and maintaining customer relationships. Revenue concentration in specific regions and workforce-related challenges also pose significant operational and financial risks.

  1. A significant part of the company’s revenue is generated from government contracts obtained through a competitive bidding process. There can be no assurance that it will qualify for, or that it will successfully compete and win such tenders or maintain these customer relationships. 
  1. A significant portion of the revenues are derived from a few geographical regions- the State of Maharastra and Tamil Nadu, and any adverse developments affecting such regions could have an adverse effect on the business, cash flows, results of operation, and financial condition.
  1. The company has a large workforce deployed across workplaces and customer premises. Consequently, the company may be exposed to service-related claims and losses or employee disruptions, as well as employee-related regulatory risks, that could have an adverse effect on the reputation, business, cash flows, results of operations, and financial condition. 

Krystal Integrated Services IPO – Industry & Market Potential

Indian Integrated Facilities Management Market is highly fragmented, with close to 400 to 500 companies operating across the country. There are around 6 large companies comprising the Tier 1 category that have their presence across geographies and control about 9.4% of the total market. 

Tier 1 companies have a country-wide presence, serve almost all the end-user segments and have a vast client base. Around 60 – 70 companies belong to Tier 2 and have a regional presence while more than 400 companies belong to the Tier 3 category and operate in a small geographic zone, for example, a single city or town. 

The market also witnesses the presence of both international and domestic companies. International companies subcontract the majority of their services to gain access to various markets, manpower, and customers in the region. 

Krystal Integrated Services Limited IPO  – Type of Offer

Krystal Integrated Services Limited plans a fresh issue of shares, seeking INR 175  crores to repay the borrowings, meet the working capital requirement, and finance the purchase of new machinery. Additionally, the company proposes an offer for sale, intending to sell 17,50,000 existing shares.

  • Fresh Issue: The company will issue new shares to raise capital, aiming to collect INR 175 crores. The company seeks funds to repay the borrowings, to meet the working capital requirement, and to finance the purchase of new machinery.
  • Offer for sale: Atmastco is offering to sell 17,50,000 existing shares. The following is the detail of the existing shareholder:
Name of the selling shareholderMaximum number of offered shares for sale (in millions)
Krystal Family Holdings Private Limited17,50,000

Krystal Integrated Services IPO Offer Size

The offer size of Krystal Integrated Services Limited’s IPO  is INR 300.13 crores, consisting of a fresh issue worth INR 175 crores and an offer to sell 17.50 lakh existing equity shares. The company seeks funds to invest in a material subsidiary and to meet the working capital requirement. plans to repay the borrowings, meet the working capital requirement, and finance the purchase of new machinery.

Krystal Integrated Services IPO Allotment Structure

Krystal Integrated Services allocation will be as follows: 75% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Individual Investors (RII) in accordance with SEBI regulations. 

Qualified Institutional Buyers (QIB): As per SEBI regulations, 75% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.

Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.

Retail Individual Investors (RII): The remaining 35% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs.