Khyati Global Ventures IPO: A Deep Dive into the SME Market Expansion

Introduction to Khyati Global Ventures Limited

Khyati Global Ventures Limited was formerly known as Khyati Advisory Services Limited. It began its niche in the international market in 1993 and is dealing primarily in the export and repackaging business of FMCG products. The company has been operating in more than 45 countries and, therefore, is raising an IPO for expansion and operational efficiency purposes.

Khyati Global Ventures Limited (KGVL) – Company Overview

Khyati Global Ventures has carved out a niche for itself as a notable player in the export and repackaging of FMCG products. With its operations spanning over 45 countries, the company has leveraged its experience to cater to diverse consumer needs, focusing on both food and non-food FMCG products, household items, and festive handicrafts. This global reach underscores its capability to navigate international markets, manage supply chains, and meet regulatory requirements across different jurisdictions.

IPO Launch Information: dates, price, strategy

The IPO of Khyati Global Ventures Limited opens from October 4, 2024, to October 8, 2024 at a price of ₹99 per share. The IPO has been structured to raise approximately ₹18.30 crores with equal contributions coming in the form of fresh issuance towards funding the working capital and an offer for sale by the promoters. The pricing and the focus on the working capital clearly show that the company intends to shore up its operational backbone rather than indulging in outright expansion of the capital.

Here’s a table summarizing the key dates for the Khyati Global Ventures Limited IPO:

Event	Date
IPO Opens	October 4, 2024
IPO Closes	October 8, 2024
Basis of Allotment Finalization	October 9, 2024
Refund Initiation	October 10, 2024
Credit of Shares to Demat A/c	October 10, 2024
IPO Listing (BSE SME)	October 11, 2024

Here’s the updated table summarizing the details regarding the Khyati Global Ventures Limited IPO:

IPO Details	Information
Company Name	Khyati Global Ventures Limited
IPO Size	₹18.30 crore
New Issue	₹10.38 crore (10.48 lakh equity shares)
Offer for Sale	₹7.92 crore (8 lakh equity shares)
Price Band	₹99 per share
Face Value	₹10 per share
Listing Exchange	BSE SME
Minimum Bid Lot	1,200 shares
Minimum Investment	₹118,800
Issue Type	Fixed Price Issue
Issue Category	SME IPO
QIB Allocation	Not specified, typical for SME IPOs
NII Allocation	Not specified, typical for SME IPOs
Retail Allocation	Not specified, typical for SME IPOs, but generally around 35%
Company Sector	Export and Repacking of FMCG Products

Khyati Global Ventures Limited Financial

In terms of finance, Khyati Global Ventures has been steady with 28.03% net worth and 15.28% EBITDA as of the fiscal year ended March 2023. These figures not only claim operational efficiency but also indicate the company’s strategy of focusing on niche markets within the FMCG sector, which is less competitive and thus sustainable.

Here’s a table comparing the financial data of Khyati Global Ventures Limited for the financial years ending March 31, 2023, and March 31, 2024:

Financial Parameter	31 Mar 2023	31 Mar 2024	Change (%)
Assets	₹3,458.90 Lakhs	₹5,275.97 Lakhs	53% Increase
Revenue	₹9,617.14 Lakhs	₹10,464.09 Lakhs	9% Increase
Profit After Tax (PAT)	₹205.66 Lakhs	₹253.19 Lakhs	23% Increase
Net Worth	₹935 Lakhs	₹1,188.19 Lakhs	27% Increase
Reserves and Surplus	₹805.6 Lakhs	₹670.59 Lakhs	17% Decrease
Total Borrowing	₹1,575.05 Lakhs	₹1,768.92 Lakhs	12% Increase

Summary of Recent Financial Performance of Khyati Global Ventures Limited:

Khyati Global Ventures Limited’s financials reflect a great growth trajectory between the fiscal year ending March 31, 2023 and the March 31, 2024 fiscal year, supporting its operational as well as financial health.

• Revenue: It increased from ₹9,617.14 lakhs in FY 2023 to ₹10,464.09 lakhs in FY 2024. Therefore, there is an increment of 9%. Growth at this percentage would indicate the actual expansion of markets or product lines and is, thus, positive.
• PAT (Profit After Tax): PAT grew from ₹205.66 lakhs to ₹253.19 lakhs, thus rising by 23%. In all likelihood, such significant growth in profitability could be attributed to tighter control over costs, higher revenue growth, or higher margins.
• Assets: Total assets increased from ₹3,458.90 lakhs to ₹5,275.97 lakhs. Such a whopping 53% increase in total assets may be associated with investment in properties, plants, and equipment, or acquisitions to sustain the growth of the company.
• Net Worth: The net worth too has seen a sound growth from ₹935 lakhs to ₹1,188.19 lakhs, representing an increase of approximately 27%. The retained earnings amount to this growth in net worth and might also indicate the profitability of the company as well as the shareholder equity.
• Reserves and Surplus: From ₹ 805.60 lakhs it came down to ₹ 670.59 lakhs as it may be dividend or other capital expenditure then it is still good reserve base for the future operations or reinvestment.
• Total Borrowing: Total borrowings have increased marginally from ₹1,575.05 lacs to ₹1,768.92 lacs. That may imply that the company is taking up more debt for expansions or other operational requirements. For better understanding of financial health, however, it is necessary to analyze the Debt-Equity Ratio.

Analysis:

Growth and Efficiency: A larger revenue size increase coupled with a higher percentage increase in PAT may reflect improved operational efficiency perhaps through increased market penetration, cost management, and product pricing strategies.

• Asset growth: The base of assets has grown significantly, reflecting strategic investments aimed at increasing production capacity in new markets and diversifying products offered.
• Leverage: Although leverage is on a rise, one needs to consider the interest coverage ratio or debt-to-equity ratio that shows whether such leverage is sustainable and beneficial to the equity shareholders
• Net Worth and Reserves: Although the reserves are declining, net worth growth has depicted that the firm can be earning and acquiring equity, and this is a positive sign for stability and future prospects in the long-run end.

This financial health overview shows Khyati Global Ventures on the positive progression trajectory with robust growth in its key financial metrics. However, the intent behind such projections demands a further analysis of liquidity ratios, capital structure, and sector-specific risks to fully make an assessment of investment worth for this IPO. Given these data, the company is strengthening its operational capacity with a set financial foundation, which depicts good cause for future growth and stability.

Khyati Global Ventures Limited IPO GMP and Subscription

According to the information provided:

• Non-Institutional Buyers have subscribed 5.14 times to the portion held for them. This reflects moderate interest from high net-worth individuals or corporate bodies who are supposed to invest more than retail investors but less than qualified institutional buyers.
• The retail investors were very bullish at the subscription rate of 23.35 times. The high subscription only signifies that retail investors have so much confidence or speculative interest in Khyati Global Ventures Limited’s IPO. They commonly focus on listing gains or get convinced about growth prospects.

Total Subscription at 14.25 times: This would imply that the total demand for the IPO was quite strong from the end of all the investor categories. This level of oversubscription generally indicates that the market has taken the issue well-it could be because of good pricing, company fundamentals, or market sentiment at the time of the IPO.

On the Grey Market Premium (GMP), you mentioned it reads at 0. GMP at 0 means that

• The grey market does not have any premium or discount on the IPO price, which makes it clear that the shares are to be listed at or almost close to the issue price.

It could mean anything: the pricing for the IPO is fair, or there isn’t a lot of speculative trading going on in this IPO’s grey market, or there is some unknown over whether the company performs post listing that keeps investors from paying the premium. The subscription figures are strong, evidencing great demand, particularly from the retail investors who generally tend to reflect high market interest that may either be inspired by listing gains or who simply view the company’s business model positively. However, a GMP not provided may reflect cautious investors in the unregulated market who fear the valuations of the deal or the prevailing broader market sentiment during the listing occasion. High subscription rates in themselves do not prove an inevitable hike in the stock price immediately after listing. Most of these factor depend on the market conditions, the performance of the company, and the investor sentiment. Zero GMP could also refer to having a zero expectation or even uncertainty in grey market.

Khyati Global Ventures Limited IPO EPS and PE Ratio Analysis

Based on the information available up to September 30, 2024, here’s an analysis of Khyati Global Ventures Limited’s IPO regarding EPS (Earnings Per Share) and PE (Price to Earnings) ratio:

• IPO Details: Khyati Global Ventures Limited’s IPO has an issue price set at ₹99 per share. The company’s operations include exporting and repackaging FMCG products, which are everyday consumer items, suggesting a relatively stable demand base.
• Financial Performance: From the financial data provided:
  • EPS: Calculating EPS for fiscal year ending March 31, 2024, using the profit after tax (PAT) of ₹253.19 lakhs and the number of equity shares as 18,48,000 shares (as per the total IPO size), we get:
  • EPS=PAT/Number of Shares=253.19 Lakhs/18.48 Lakhs Shares≈₹13.70 per share.
  • This calculation uses the number of shares offered in the IPO, which might not reflect the total outstanding shares if there are more shares issued or reserved outside the IPO.
• PE Ratio Analysis: With an issue price of ₹99 per share:
  • Using the calculated EPS:
  • PE Ratio=Share Price/EPS=₹99₹/13.70≈7.23.
  • This PE ratio seems quite low, which might indicate undervaluation if the company’s future earnings growth is expected to be significant. However, this should be analyzed in context with industry averages, growth prospects, and risk factors.

Conclusion: Is Khyati Global Ventures IPO Worth the Investment?

Conclusion : Khyati Global Ventures Limited IPO is a classic example of investing in a niche player within the well-known sector. The investment here would give a player interested in long-term growth within relatively less volatile FMCG, having a global reach, an interesting proposition. However, such a decision should always be balanced against the background of sector dynamics, the strategic direction of the company, and the broader market conditions. In one way, this IPO is speculative; however, with those markets being less explored, there are growth considerations and risks of entering the market as a small-to-medium enterprise in a competitive field.

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