Krystal Integrated IPO open for subscription: 10 key risks investors should know before investing

The subscription period for Krystal Integrated IPO began today, Thursday, March 14, and will finish on Monday, March 18. The price band for the Krystal Integrated IPO has been determined at ₹680 to ₹715 for each equity share with a face value of ₹10. Bids can be placed for multiples of 20 shares, or at least 20 shares. The IPO has raised ₹90.04 crores from anchor investors, on Wednesday, March 13.

Also Read: Krystal Integrated Services IPO opens today. GMP, subscription status to review. Buy or not?

According to the company's Red Herring Prospectus (RHP), which cited the F&S Report, Krystal Integrated Services is one of India's top providers of integrated facilities management services, with a focus on public administration (state, local, and other government offices), healthcare, education, airports, rail and metro infrastructure, and retail.

Also Read: Krystal Integrated IPO: Mumbai-based company garners ₹90 crore via anchor book ahead of public issue

Krystal Integrated IPO consists of an offer-for-sale (OFS) of up to 1,750,000 equity shares with a face value of ₹10 each, made by Krystal Family Holdings Private Limited, the selling shareholder, together with a fresh issue of ₹175 crore.

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The following are a few of the key risks that the company mentioned in its Red-Herring Prospectus (RHP):

• A small number of clients account for a considerable portion of the company's revenue from operations; in Fiscal 2023, the top five, top 10, and top 20 customers contributed 34.91%, 59.19%, 72.58%, and 85.86% of the total.
• Government contracts won through competitive bidding processes provide for a sizeable portion of the company's income; for Fiscal 2023, these contracts accounted for 73.66% of total revenue from operations. It is impossible to predict if the business will be able to continue these client ties or be eligible for such tenders.
• The company's target markets—government expenditure, healthcare, and education—might not expand as expected.
• A sizable employees of the organisation is dispersed among offices and client sites. As such, the firm could be subject to personnel-related regulatory risks, employee disruptions, and service-related claims and losses, all of which might negatively impact the company's operations, cash flows, reputation, and financial health.
• The company's operations may suffer if clients decide not to extend their contracts with them or if we are unable to find new clients.

Also Read: Krystal Integrated Services IPO to open tomorrow: GMP, issue details, 10 key things to know before investing

• The company might not be able to do background checks on both its staff and billable workers before assigning them to clients.
• The company relies on its suppliers to provide the tools and materials needed to provide its services and solutions.
• A substantial disruption to ERP or IT systems, or a breach in data protection, might have a negative impact on the company's operations.
• In certain cases, there are minimal barriers to entry and fierce competition in the industries in which they operate. The company's operations, cash flows, business, and financial status might all suffer from its incapacity to compete successfully.
• The business has risks related to its contracts, such as its inability to accurately estimate terms of pricing, labour expenses, and other financial commitments.

Also Read: Krystal Integrated Services IPO: Price band set at ₹680-715 apiece, check issue details, key dates, more

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.