The initial public offering (IPO) of Krystal Integrated Services saw a muted response from the investors during the second day of the bidding process. The issue saw a mixed interest from all categories of bidders. The issue was overall subscribed 36 per cent on the first day of the bidding.
The Mumbai-based Krystal Integrated Services is selling its shares in the price band of Rs 680-715 apiece. Investors can apply for a minimum of 20 shares and its multiples thereafter. The Rs 300 crore issue includes a fresh share sale of Rs 175 crore and an offer-for-sale (OFS) of up to 17.50 lakh shares by its promoter Krystal Family Holdings.
According to the data, the investors made bids for 14,30,940 equity shares, or 48 per cent, compared to the 29,99,448 equity shares offered for the subscription by 13.15 pm on Friday, March 15. Bidding for the issue, which had kicked off on Thursday, March 14, will conclude on Monday, March 18.
The allocation for retail investors was subscribed 49 per cent, while the portion reserved for non-institutional investors saw a subscription of 64 per cent. However, the portion set aside for qualified-institutional bidders (QIBs) attracted bids for 34 per cent, as of the same time.
Krystal Integrated Services, incorporated in December 2000, provides facilities management services. They offer a wide range of services such as housekeeping, sanitation, landscaping, gardening, mechanical, electrical and plumbing services, waste management, pest control, façade cleaning, and other services.
The grey market premium of Krystal Integrated Services has corrected sharply, amid the volatility in the broader markets. Last heard, the company was commanding a grey market premium (GMP) of Rs 35-40, suggesting a listing pop of only 5 per cent to the investors. However, its GMP stood at Rs 90 earlier.
Brokerage firms, tracking the issue are, mostly positive on it citing its sound track record, strong execution performance, robust financial growth and reasonable valuations. However, a few analysts are skeptical on the issue on the back of current market sentiments, dependence on select clients and stiff competition in the industry.
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Krystal is rightly placed in the Rs 98,100 crore Indian outsourced IFM industry growing at a CAGR of 15 per cent. With its wide bouquet of services, Krystal successfully upsells and retains its existing customers as well as enjoys competitive advantage over its peers, said Nirmal Bang Securities.
“With huge spending thrust coming up in the government sector in airports and Railways, Krystal is bound to gain good market share and maintain its growth momentum in the coming years as well. However, we believe valuations are fairly priced and recommend a ‘neutral’ rating to the IPO,” it said.
A day before its IPO, Krystal Integrated Services mobilized a total of Rs 90.04 crore from anchor investors by allocating 12,59,265 shares at a price of Rs 715 apiece. The company has reserved 50 per cent of the net offer for the qualified institutional investors (QIBs), while non-institutional investors (NIIs) will get 15 per cent of shares. Retail investors will get 35 per cent of the net offer.
Krystal provides a comprehensive suite of integrated facility management services across various sectors, boasting a successful track record in handling sizable government contracts across multiple locations. With a diverse portfolio of services, it can tailor solutions to meet the specific requirements of its clients, enhancing its ability to attract and retain customers, said GEPL Capital.
“Its widespread geographic coverage allows for seamless service delivery to clients seeking a single provider for operations across multiple sites. Given these favorable industry dynamics, the company is well-positioned to capitalize on emerging opportunities across multiple sectors. Hence, We recommend ‘subscribe’ rating to the issue,” GEPL Capital added in its IPO note.
Inga Ventures is the sole book running lead manager of the Krystal Integrated Services IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed at both BSE and NSE with March 21, Thursday as the tentative date of listing on the bourses.
