Khyati Global Ventures Limited

Today we will talk about Khyati Global Ventures Limited a company which built a solid reputation by exporting a diverse range of products including food items handcraft goods , This company launch its IPO which is released at October 04, 2024 .

Khyati Global Ventures Limited , formerly known as Khyati Advisory Services Limited , is a key player in the export and repackaging industry, dealing primarily in Fast-Moving Consumer Goods (FMCG). Established in 1993, the company has built a solid reputation by exporting a diverse range of products, including food items, pharmaceuticals, household essentials, and handicraft goods. Investors eyeing the company’s growth prospects should consider both its strengths and potential risks before making decisions.

Key Financials and Performance of Khyati Global Ventures Limited 

Khyati Global Ventures has demonstrated consistent financial growth, which can be an appealing factor for investors. Between the financial years ending March 2022 and March 2024, the company saw its revenue increase from ₹9,362.7 lakhs to ₹10,464.09 lakhs, with profits after tax rising from ₹149.66 lakhs to ₹253.19 lakhs, representing a CAGR of 30.07%. Its Return on Equity (ROE) stood at 25.58% as of June 2024, while its Return on Capital Employed (ROCE) was 17.73%. The company’s healthy profit margins and consistent revenue growth are positive indicators for investors​.

IPO Insights of Khyati Global Ventures Limited 

Khyati Global Ventures launched its Initial Public Offering (IPO) from October 4 to October 8, 2024, at a price of ₹99 per share. The IPO comprises 1,048,000 fresh equity shares and 800,000 shares through an offer for sale, aggregating up to ₹26.22 crore. The funds raised are intended to fuel the company’s working capital requirements and general corporate purposes.

Investors should be mindful that the company’s IPO is being listed on the BSE SME platform, which generally carries higher risks compared to large-cap stocks due to lower liquidity and market visibility. The investment minimum lot size is 1200 shares.

Strengths and Opportunities of Khyati Global Ventures Limited 

• Diversified Product Portfolio: The company’s offerings span a wide variety of FMCG products, including food, pharmaceuticals, and household essentials, which helps mitigate risks from fluctuations in demand for specific categories.
• Export Focus: A significant portion of Khyati’s revenue comes from exports, giving the company a solid foothold in international markets.
• Infrastructure: The company operates from multiple offices and a 20,000 sq ft warehouse in Mumbai, providing the necessary infrastructure to handle its large-scale operations.
• Promising Industry Trends: With the growth of financial advisory services in India and the government’s support for small and medium enterprises (SMEs), Khyati Global Ventures is well-positioned to benefit from increasing demand​.

Risks for Investors of Khyati Global Ventures Limited 

• Foreign Exchange Risk: Given that a large portion of the company’s revenue is export-driven, fluctuations in currency exchange rates could adversely affect profitability.
• Client Concentration: Khyati Global Ventures relies heavily on a small number of customers. The loss of a major client could significantly impact the company’s financial performance.
• Legal and Regulatory Risks: The company is involved in several legal proceedings, which could have material effects on its operations if the outcomes are unfavourable.
• Dependency on Promoters: The company relies on its promoters and key management personnel for operations. Any departure could disrupt business continuity​.

Valuation and Investor Sentiment of Khyati Global Ventures Limited 

While Khyati Global Ventures has shown steady growth, concerns about its high debt levels and export dependency may pose significant risks for investors. For example, the company’s Debt/Equity ratio, which was 1.02 as of June 2024, suggests that the company relies on debt financing to a significant extent. Furthermore, the company’s high debt/EBITDA ratio raises concerns about its ability to manage debt.

Despite these risks, its valuation post-IPO suggests a price-to-earnings (P/E) ratio of around 18.24, indicating a relatively fair market valuation. However, analysts have noted that this IPO could be more suited for high-risk investors due to its SME platform listing, limited market visibility, and export-related challenges.

Khyati Global Ventures Limited Launching IPO

Khyati Global Ventures Limited is launching its Initial Public Offering (IPO) from October 4 to October 8, 2024. It is an SME (Small and Medium Enterprises) IPO and will be listed on the BSE SME exchange.

Key IPO Details:

• IPO Price: ₹99 per share
• Issue Size: ₹18.30 crores
• Fresh Issue: ₹10.38 crores
• Offer for Sale: ₹7.92 crores
• Market Lot: 1,200 shares (Minimum investment of ₹118,800)
• Bidding Start : October 04, 2024
• Bidding Ends : October 08, 2024
• Allotment Finalisation : October 09, 2024
• Refund Initiation : October 10, 2024
• Demat Transfer : October 10, 2024
• Listing Date: October 11, 2024
• Allotment Date: October 9, 2024

Investment Considerations:

• Business Model: Khyati Global Ventures focuses on bulk procurement and export of fast-moving consumer goods (FMCG) like spices, grains, and pulses. They have an asset-light business model that helps reduce operational costs and maximize returns.
• Use of Funds: The proceeds from the IPO will be used primarily to meet working capital requirements and general corporate purposes.
  Investors should carefully consider their risk tolerance and investment goals, as SME IPOs can have higher volatility compared to mainboard listings.

Conclusion 

For investors considering Khyati Global Ventures Limited , the company presents both opportunities and risks. On the one hand, its growing revenue, strong international presence, and diversified portfolio make it an attractive option for those willing to take on higher risk. On the other hand, its reliance on exports, potential legal complications, and client concentration issues should be carefully weighed before making investment decisions. Given the SME platform’s inherent volatility, the IPO might be more suited to experienced investors who understand the dynamics of smaller, riskier listings.