Krystal IPO Day 1 Subscription
Since it began accepting subscriptions earlier today, Krystal Integrated Services' initial public offering (IPO) has already received 23% of the total. The offering consists of a Rs 125 crore offer for sale (OFS) and a new equity sale valued at Rs 175 crore.
Retail investors made up 24% of the subscribed group, while QIBs and NIIs made up 33% and 8% of the total.
Krystal Integrated Services Limited IPO
Issue Date: The issue date of an IPO refers to the specific date on which the shares of a company are issued to the investors who have subscribed to the IPO. This is the date when the company officially allocates shares to its subscribers. (March 14, 2024 to March 18, 2024).
Listing Date: The "listing date" is when these shares are first traded on a stock exchange. This marks the beginning of public trading, allowing all market participants to buy and sell the company's shares.(Date: March 21, 2024).
Face Value of Shares: The face value of shares is the nominal value of a stock that is determined by the issuer at the time of issuing the shares. It is usually a small amount, that does not reflect the actual market value of the shares. The face value of shares is used to calculate the accounting value of a company's equity, as well as the dividend payments and the par value of bonds. ( IPO Face Value: INR 10 per share).
Price Band: A price band of an IPO is the range of prices within which the investors can bid for the shares of a company that is going public. The price band is set by the issuer and the lead managers of the IPO, based on various factors such as the demand and supply of the shares, the financial performance and valuation of the company, and the market conditions. (IPO Price: INR 680 to INR 715 per share).
Lot Size: Lot size refers to the minimum number of shares an investor can purchase in an Initial Public Offering (IPO). It is determined by the company going public and is a way to standardize the number of shares offered to investors. (Lot Size: 20 Shares).
Total Issue Size: Total issue size is the total value of shares a company plans to sell during its IPO. It is calculated by multiplying the number of shares offered by the price per share. The total issue size gives investors an idea of the scale of the IPO and the potential market capitalization of the company post-IPO. [Total Issue Size: 4,197,552 shares (aggregating up to ₹300.13 Cr)).
Fresh Issue: Fresh issue in an IPO refers to the new shares a company creates and sells to the public for the first time during the offering. This is the primary way a company raises capital through an IPO. The money raised from the fresh issue is used for various purposes as outlined in the company's prospectus, such as funding expansion plans, repaying debt, or investing in research and development. (Fresh Issue: 2,447,552 shares (aggregating up to ₹175.00 Cr)).
Offer for Sale: The offer for sale, which is the amount and type of shares that the company is selling to the public. The offer for sale can be either primary or secondary, or a combination of both. A primary offer for sale means that the company is issuing new shares and raising fresh capital. A secondary offer for sale means that the existing shareholders are selling their shares and receiving the proceeds. A combination offer for sale means that both new and existing shares are being sold. (Offers for Sale: 1,750,000 shares of ₹10 (aggregating up to ₹125.13 Cr)).
Issue Type: The type of an IPO can vary depending on the market and regulatory conditions. Some of the common types of IPOs are, Fixed priced IPO, Auction IPO, Book Building IPO, and Hybrid IPO. (Issue Type: Book Building IPO).
Listing At: An integral part of the IPO process is the listing. This refers to the day the company's shares officially begin trading on a stock exchange, such as the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE) in India. Once listed, anyone with a brokerage account can buy and sell the company's shares on the exchange. (Listing at: BSE, NSE).
Retail Shares Offered: Retail shares offered refer to the portion of shares that are made available to individual retail investors during an Initial Public Offering (IPO). (Retail Shares Offered: Not less than 35% of the net offer).
QIB Shares Offered: QIBs are institutional investors such as banks, mutual funds, insurance companies, pension funds, etc., who have expertise and financial resources to invest in the securities market. They are considered as informed and sophisticated investors who can assess the risks and returns of an IPO. QIBs can bid for up to 50% of the total shares offered in an IPO via the profitability route, or up to 75% of the total shares offered in an IPO via the QIB route. QIBs have to pay only 10% of the bid amount at the time of application, and the rest after the finalization of the basis of allotment. (QIB Shares Offered: Not more than 50% of the net offer).
NII (HNI) Shares Offered: NII (HIN) Shares offered means Non-Institutional Investors (High Networth Individuals) shares, which are reserved for investors who do not fall into the retail or QIB categories and typically involve larger amounts of money. (NII Shares Offered: Not less than 15% of the net offer).
Facilities management services are offered by Krystal Integrated Services, which was established in December 2000. They provide a broad range of services, including waste management, pest control, façade cleaning, landscaping, gardening, housekeeping, sanitation, and mechanical, electrical, and plumbing services.
Amidst the turmoil in the larger markets, Krystal Integrated Services' grey market premium has experienced a significant correction. As of the last hearing, the business was asking for a grey market premium (GMP) of Rs 35, meaning that investors would only be offered a 5% listing premium. But previously, its GMP was Rs 90.
Brokerage firms that follow the issue are largely optimistic about it because of its solid performance in execution, great track record, strong financial growth, and fair valuations. Nonetheless, several experts are dubious about the matter regarding the back of current market sentiments, dependence on select clients and stiff competition in the industry.
Here are some reasons why investors might consider subscribing to the Krystal Integrated Services Limited (KIS) IPO:
Strong Track Record and Financial Performance:
Growth and profitability: Reports suggest Krystal boasts a history of impressive growth and robust financial performance, delivering consistent value to its stakeholders.
Market leader: The company is reportedly a leading provider of integrated facilities management services in India. This established position within the industry can be viewed as a positive sign.
Diversification and Growth Potential:
Diverse service offerings: Krystal caters to a wide range of services across various sectors like healthcare, education, transportation, and infrastructure. This diversification can mitigate risk associated with dependence on a single industry.
Emerging market opportunities: The report mentions Krystal's potential to capitalize on emerging market opportunities, suggesting room for future growth.
Reasonable Valuation:
Competitive pricing: Some analysts believe the IPO is priced reasonably compared to its peers. This could indicate an attractive entry point for investors.
Debt Repayment and Expansion Plans:
Reducing debt: Proceeds from the IPO are allocated towards debt repayment, potentially improving the company's financial health.
Investment in growth: The funds raised might also be used for investments in new machinery and general corporate purposes, which could fuel future expansion.
Disclaimer: This is not an investment advisory. The article above is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing securities, that suit your needs. The performance and returns of any equity stock can neither be predicted nor guaranteed.
FAQs
Q: What is an IPO?
An Initial Public Offering (IPO) is the first time a company offers its shares for sale to the public on a stock exchange. This allows the company to raise capital for growth and expansion.
Q: How can I apply for an IPO?
There are two main ways to apply for an IPO:
Retail Investor: You can apply through your trading broker using a Demat account and ASBA facility (explained below).
Institutional Investor: Large investors like banks and mutual funds have a separate application process.
Q: What is ASBA?
ASBA (Application Supported by Blocked Amount) is a safe and convenient method to apply for IPOs. With ASBA, the funds you bid for the IPO are blocked in your bank account and only debited if your bid is successful. This prevents unsuccessful applicants' money from being tied up.
Q: What is the difference between a fixed-price and a book-building IPO?
Fixed-Price IPO: The company sets a fixed price for the shares offered in the IPO.
Book-Building IPO: The price of the shares is determined based on investor demand during a bidding process.
Q: What are the risks involved in investing in IPOs?
New companies: IPOs often involve young companies with limited track records, so there's a higher risk of their stock price being volatile.
Overvaluation: Some IPOs can be overvalued, leading to a potential drop in share price after listing.
Q: How much should I invest in an IPO?
IPO investments should be a part of a diversified portfolio. Only invest what you can afford to lose, considering the inherent risks involved.
Q: What happens after I apply for an IPO?
The company allocates shares based on the bids received. You will be notified if your application is successful or not. The shares will then be credited to your Demat account after the listing date.
Q: When should I sell my IPO shares?
This is a personal decision based on your investment goals and risk tolerance. Some investors hold for the long term, while others may sell soon after listing to capture potential gains.
Q: Where can I find information about upcoming IPOs?
Many financial websites and brokerage firms provide information on upcoming IPOs, including issue details, timelines, and prospectuses.
Q: What are the tax implications of investing in IPOs?
Short-term capital gains tax applies to IPO shares sold within one year of purchase. Long-term capital gains tax applies if held for over a year, and the rates may vary depending on the country's tax regulations.