The Indian indices hit all-time highs recently with the Sensex crossing the 64000 mark and Nifty crossing 19000. According to industry experts, it is the strong domestic earnings, healthy institutional flow, and macro factors that are driving the market highs. Amidst this bullish market, the newest IPO opportunity for investors was PKH Ventures Limited IPO, a company engaged in the business of Construction & Development, Hospitality, and Management Services. The company came out with its IPO on 30th June 2023.
PKH Ventures has, however, withdrawn its initial public offering (IPO) after it failed to meet the minimum subscription requirements. The IPO was seeking to raise Rs 379.35 crore, but it only managed to attract bids for 65% of the shares on offer.
According to the Securities and Exchange Board of India (SEBI), an IPO must be subscribed to by at least 90% of the total number of shares on offer in order to be successful. However, in the case of PKH Ventures, even the qualified institutional buyers (QIBs) quota, which is reserved for institutional investors, was undersubscribed.
Here are all the details of PKH Ventures Limited IPO.
The key details of PKH Ventures Limited are as under.
The size of the IPO and different categories of the issue are:
| Category | Details |
| IPO Opening Date | 30th June 2023 |
| IPO Closing Date | 4th July 2023 |
| Listing | NSE, BSE |
| Issue Type | Book Built Issue IPO |
| Face Value of shares | Re. 10 per share |
| IPO Price Band | Rs. 140 – Rs. 148 per share |
| IPO Size | Rs. 379 crores |
| Offer for Sale | Rs. 109 crores |
| Fresh Issue | Rs. 270 crores |
The important dates for PKH Ventures Limited IPO are highlighted below:
| Event | Date |
| Opening date | 30th June 2023 |
| Closing Date | 4th July 2023 |
| Allotment date | 7th July 2023 |
| Refund Date | 10th July 2023 |
| Share Credit Date | 11th July 2023 |
| Listing Date | 12th July 2023 |
Investors can subscribe to PKH Ventures Limited shares in pre-defined lots. The details of the lot sizes for this IPO are mentioned below:
| Category | Details |
| Investments in lots | Minimum – 1 lotMaximum – 13 lots |
| Investment amount | Minimum – Rs. 14,000 – 14,800Maximum – Rs. 1,92,400 |
| Shares | Minimum – 100Maximum – 1300 |
Here’s the summary of reservation for different applicant categories in this IPO:
| Category of Investor | Reservation Percentage |
| Retail Individual Investors | 35% |
| QIB (Qualified Institutional Buyers) | 50% |
| NII (Non-Institutional Bidders) | 15% |
This IPO was combination of a fresh issue and an offer for sale. The proceeds from the issue were to be utilised in the following manner.
The company was incorporated in 2000 and is in a unique position with businesses in Construction and Development, Hospitality, and Management Services. The company’s subsidiary, Garuda Construction, handles the execution of Civil Construction projects for external developers. PKH Ventures successfully completed the construction of the Delhi Police Headquarters in April 2021 which included two seventeen-story towers interconnected by a steel bridge, featuring an impressive glass exterior. Among its future prospects, the company plans for its own upcoming development projects, such as real estate ventures in Amritsar, Punjab, a food park in Jalore, Rajasthan, cold storage facilities in Indore, Madhya Pradesh, and a wellness center & resort in Chiplun, Maharashtra.
The hospitality business of PKH Ventures focuses on owning, managing, and operating hotels, restaurants, QSRs, spas, and the sale of food products. The company also provides mechanical, electrical, and plumbing (MEP) services, including annual maintenance for its projects as well as certain third-party operation and maintenance (O&M) contracts. PKH Ventures has been owning, managing, and operating approximately 180 Mumbai Hotels since FY 2015 and has developed two big names in the hotel industry in Mumbai, i.e, Golden Chariot Hotel & Spa, Vasai, and Golden Chariot, The Boutique Hotel near Mumbai International Airport.
PKH Ventures Limited’s financials are given in the table below:
| Year | Total Assets (Rs. in cr) | Operating Revenue (Rs. in cr) | Profit after tax (Rs. in cr) | Basic EPS | Return on Net Worth |
| Mar-2022 | 1,102 | 199 | 40 | Rs.6.33 | 12.38% |
| Mar-2021 | 1,077 | 241 | 30 | Rs.5.06 | 16.55% |
| Mar-2020 | 245 | 165 | 14 | Rs.2.35 | 9.43% |
Some of the key strengths of PKH Ventures Limited that investors can take note of are:
| Category | Details |
| Business model | The company has an established track record and has the asset light model of the Civil Construction Business.PKH Ventures has seen visible growth with the increase in the Third Party Developer Order Book, Government Projects, Government Hotel Development Projects, and Forthcoming Development Projects.The company is expanding its Hospitality business by developing new hotels and expanding restaurant operations. |
| Other merits | PKH Ventures can leverage business growth by identifying and forming strategic joint venture relationships.The company has established relationships and a good reputation in the industry which can further enable it to build an order book. |
Here are some of the risks of investing in PKH Ventures Limited IPO:
| Category | Details |
| Business viability and profitability | The company revenues are majorly dependent on construction and development projects.PKH Ventures is dependent on third parties for the completion of their projects which can impact their ultimate revenues. The Hydro Power Project of the company faces weather-related risks like floods, cloudbursts, and similar environmental risks. |
| Other concerns | The company has zero experience in developing and selling a real estate project and therefore can be a big challenge for them. There can be a delay or default by the power distribution company in payment of its dues for the sale of power from the Hydro Power ProjectThere is an ongoing dispute with the Delhi Police regarding the newly developed Delhi Police Headquarters leading to a delay or cessation of annuity payments |
As of June 29th, 2023, the grey market premium for the shares of PKH Ventures Limited IPO was Rs. 8 as per market observers.
It remains to be seen whether PKH Ventures will try to launch its IPO again in the future. However, the withdrawal of this IPO is a setback for the company and its investors.
Investors can invest in this IPO through the Fisdom app.
The profit margin of PKH Ventures has increased from Rs. 14 crores in FY 21 to Rs. 40 crores in FY 22 indicating a CAGR of approximately 42.1%
The company has no prior experience in developing and operating a Hydro Power Project and therefore, it can be a big risk to the company’s reputation as well as its financial performance thereby leading to its viability in the long run.
HNIs can apply for the PKH Ventures IPO through the Fisdcom app under the NII category. It is important to note that investment in this category can be between Rs. 2,00,00 to Rs. 5,00,000.
A positive GMP for an IPO indicates that the investors have the potential opportunity to earn short-term returns in the form of listing gains.
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