Krystal Integrated Services, a prominent player in India’s integrated facilities management services sector, is gearing up to launch its Initial Public Offering (IPO) next week. With a focus on various sectors including healthcare, education, public administration, airports, railways, and retail, Krystal offers a comprehensive suite of services tailored to meet diverse customer needs. Here are 10 key points investors should know about Krystal Integrated Services IPO:
Table of Contents
#1 Krystal Integrated Services IPO: Diverse Service Portfolio
Krystal’s service portfolio encompasses a wide array of offerings, including soft services like housekeeping and sanitation, as well as hard services such as mechanical and electrical maintenance. The company also specializes in waste management, pest control, and catering services, among others. As of 30 September 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, along with catering services on certain trains/ train routes.
#2 Krystal Integrated Services: Leading Player in a Scattered Market
Krystal Integrated Services stands as one of India’s leading integrated facilities management service providers. According to a report by F&S, the company is eighth largest player in India’s integrated facilities management market with the market share of 0.4%. The market share may look quite small but let’s not forget the scattered nature of this market. Sodexo – the biggest player in this category – has a market share of just 2.4%!
#3 Krystal Integrated Services IPO: Geographic Presence
With a presence in 16 states and two union territories across India, Krystal has strategically positioned itself to cater to clients’ needs nationwide. The company’s 21 branch offices further enhance its geographical reach, facilitating personalized and high-quality service delivery. Its operations are further supported by a large pool of 40,100 on-site employees, as on January 31, 2024.
Krystal also has Training Academy’ in Vashi, Maharashtra to train security guards, house keepers, facility attendants, area officers and supervisors.
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#4 Krystal Integrated Services IPO: Dominance in Government Contracts
The company has a robust foothold in the government sector and it is evident from its substantial revenue derived from government contracts, ranging from 69.41% to 76.27% over the past few years. This highlights Krystal’s reliability and capability to handle large-scale projects.
Krystal provides services to key government customers in the healthcare, education, airport, railways, and metro infrastructure sectors, including Maha Mumbai Metro Operation Corporation Limited and the Education Department, Brihanmumbai Municipal Corporation.
#5 Krystal Integrated Services IPO: Strong Customer Base
Krystal boasts a broad customer base, serving a diverse range of clients across multiple locations. The company’s ability to maintain quality standards while expanding its service offerings has fostered long-standing relationships with key customers, contributing significantly to its revenue stream.
Operating on a business-to-business (B2B) model, Krystal leverages its wide array of services to offer tailored solutions to clients, fostering strong customer acquisition and retention. For the six months ended 30 September 2023, four of its top 10 customers have been associated with it for more than 10 years. These four customers contributed 17.06% to Krystal’s revenues.
#6 Krystal Integrated Services IPO: Offer Details
The Krystal Integrated Services IPO is scheduled for 14 to 18 March 2024. The IPO consists of an Offer for Sale (OFS) of 1,750,000 shares and a Fresh Issue amounting to INR 175 crores. The retail investors are allotted 35% of the shares. The IPO will be listed on both BSE and NSE.
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#7 Krystal Integrated Services: Objects of the Issue
The company proposes to utilize the Net Proceeds from the Fresh Issue towards funding the following objects:
- Repayment/prepayment, in full or part, of certain borrowings availed of by the company – INR 10 crore
- Funding working capital requirements of the company – INR 100 crore
- Funding capital expenditure for the purchase of new machinery – INR 10 crore
- General corporate purposes
#8 Krystal Integrated Services: Market Opportunities
The outsourced integrated facility management market in India presents significant growth prospects, fueled by factors such as rapid urbanization, increased investments in infrastructure, and rising demand from key end-user segments. The outsourced integrated facility management market in India is expected to grow at a CAGR of 14.6% between Fiscal 2023 and fiscal 2028.
#9 Krystal Integrated Services IPO: Robust Financial Performance
The company’s financials depict a positive growth trajectory, with revenue, total profit, and EBITDA showcasing significant increases over the past few years. The revenue from operations, total profit for the year (after tax), and EBITDA grew at a CAGR of 22.54%, 51.17%, and 34.56%, respectively from Fiscal 2021 to Fiscal 2023.
| FY 2021 | FY 2022 | FY 2023 | H1 FY 2024 | |
| Revenue | 471.29 | 552.68 | 707.64 | 451.61 |
| Expenses | 464.89 | 527.75 | 671.95 | 430.16 |
| Net income | 16.65 | 26.15 | 38.41 | 20.56 |
| Margin (%) | 3.53 | 4.73 | 5.43 | 4.55 |
Enhanced profitability can also be gauged from its rising return ratios and EBITDA margins. As indicated in the table below, the debt-equity ratio has remained stable in these years.
| FY 2021 | FY 2022 | FY 2023 | |
| EPS | 14.45 | 22.69 | 33.33 |
| PE ratio | – | – | – |
| RONW (%) | 12.37 | 16.04 | 23.53 |
| NAV | 283.59 | 284.36 | 236.15 |
| ROCE (%) | 19.01 | 25.03 | 28.82 |
| EBITDA (%) | 6.39 | 8.22 | 7.70 |
| Debt/Equity | 0.50 | 0.45 | 0.31 |
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#10 Krystal Integrated Services IPO: Investment Considerations
For investors in Krystal Integrated Services IPO, several factors warrant consideration. The company’s dominant presence in government contracts, diverse service portfolio, strategic sector expertise, and robust financial performance paint a promising investment picture. However, it’s essential to assess potential risks such as sector-specific challenges, competition, and economic volatility. Conducting thorough due diligence and consulting with financial experts can help investors make informed decisions regarding participation in the IPO.
Conclusion
In conclusion, Krystal Integrated Services’ IPO presents an opportunity to invest in a dynamic player in India’s facilities management sector, backed by a strong track record of performance and growth potential in the evolving market landscape.
