Khyati Global Ventures Limited, formerly known as Khyati Advisory Services Limited, is set to launch its IPO from October 4, 2024, to October 8, 2024. The company operates primarily as an exporter and repacker of a variety of FMCG products, including food, pharmaceuticals, and handicraft items. With its focus on the export business, the company has customers across more than 40 countries.
Let’s explore the details of the IPO and analyze whether investors should consider applying.
Khyati Global Ventures IPO Details:
- IPO Open Dates: October 4, 2024 – October 8, 2024
- Price: ₹99 per share
- Face Value: ₹10 per share
- Lot Size: 1,200 shares
- Minimum Investment: ₹118,800 for retail investors
- Total Issue Size: ₹18.30 crore (Fresh Issue of ₹10.38 crore, Offer for Sale of ₹7.92 crore)
- Listing at: BSE SME
- Listing Date: October 11, 2024
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Key IPO Metrics:
| Details | Values |
|---|---|
| Fresh Issue | 1,048,000 shares (₹10.38 Cr) |
| Offer for Sale | 800,000 shares (₹7.92 Cr) |
| Market Maker Portion | 93,600 shares |
| Pre-Issue Shareholding | 87.46% |
| Post-Issue Shareholding | 62.86% |
| Market Cap (at issue price) | ₹69.08 Cr |
About Khyati Global Ventures Limited:
Khyati Global Ventures was incorporated in 1993 and has evolved into a diverse business dealing in FMCG, pharmaceuticals, and handicraft products. The company exports products under well-known Indian brands like Parle G, Everest, Haldiram’s, and Unilever to wholesalers and importers of supermarkets worldwide. With a large warehouse in Navi Mumbai and four offices in Juhu, Maharashtra, the company is positioned to handle large-scale logistics for its export business.
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Financial Performance:
Khyati Global Ventures has shown steady financial growth, particularly in profit after tax (PAT) and revenue. Here’s a breakdown:
| Period | 30 Jun 2024 | 31 Mar 2024 | 31 Mar 2023 | 31 Mar 2022 |
|---|---|---|---|---|
| Assets (₹ Lakhs) | 4,911.62 | 5,275.97 | 3,458.90 | 3,468.13 |
| Revenue (₹ Lakhs) | 2,716.92 | 10,464.09 | 9,617.14 | 9,362.70 |
| PAT (₹ Lakhs) | 94.67 | 253.19 | 205.66 | 149.66 |
| Net Worth (₹ Lakhs) | 1,773.02 | 1,188.19 | 935.00 | 729.35 |
The company has demonstrated consistent growth in revenue and PAT over the past few years, with a notable 23% rise in PAT between FY23 and FY24.
Strengths:
- Diverse Product Portfolio: The company’s product line ranges from FMCG items to pharmaceuticals and handicrafts, targeting essential and fast-moving consumer goods across different categories.
- Export Business Focus: With over 40 countries in its export network, Khyati Global Ventures has an established international presence, which adds strength to its revenue base.
- Infrastructure and Warehouse Facilities: The company’s 20,000 sq ft warehouse in Navi Mumbai supports smooth operations in logistics and product handling.
- Experienced Management Team: Promoters and management have extensive experience in the FMCG and export sectors, ensuring steady growth and strategic decisions.
Risks:
- High Debt Levels: The company has a Debt/Equity ratio of 1.02, indicating a relatively high level of debt. The debt/EBITDA ratio above 11 raises concerns about its financial leverage.
- Third-Party Supply Dependency: Khyati Global Ventures relies heavily on third-party suppliers for its repacking and export operations. This makes the business vulnerable to supply chain disruptions or quality control issues.
- Fully Priced Issue: Based on its FY25 annualized earnings, the IPO appears to be fully priced, limiting potential immediate upside.
- Small Post-IPO Equity Base: With a relatively small post-IPO equity base, investors may face a longer waiting period before seeing meaningful returns, particularly if the company’s performance does not outpace expectations.
- Limited Liquidity: The company will list on the BSE SME platform, where liquidity and trading volumes tend to be lower than on the main board, which could affect share price movement post-listing.
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Key Performance Indicators (KPIs) as of June 30, 2024:
- Return on Equity (ROE): 25.58%
- Return on Capital Employed (ROCE): 17.73%
- Debt/Equity Ratio: 1.02
- P/BV Ratio: 3.31
- RoNW: 5.34%
Objects of the IPO:
- Working Capital Requirements: The company intends to use a portion of the proceeds to fund its working capital needs, supporting daily operations and inventory management.
- General Corporate Purposes: The remaining proceeds will be used for general corporate expenses, contributing to the company’s overall financial health and growth strategies.
Khyati Global Ventures IPO Review: Apply or Not?
Investment Verdict: [Avoid]
According to market experts like Dilip Davda, the IPO of Khyati Global Ventures comes with significant risks, primarily due to its reliance on third-party supply chains and its high debt levels. While the company has shown consistent growth in its financials, the issue appears fully priced, limiting upside potential. Additionally, its high debt-to-EBITDA ratio and the small post-IPO equity base suggest a long gestation period for any meaningful return on investment.
For investors seeking safer, more stable growth opportunities, it may be prudent to skip this IPO, especially given the “High Risk/Low Return” profile of this offer.
Khyati Global Ventures IPO Registrar:
- Registrar: Bigshare Services Pvt Ltd
- Phone: +91-22-6263 8200
- Email: ipo@bigshareonline.com
- Website: Bigshare IPO Status
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