PKH Ventures Limited..

PKH Ventures Limited’s Initial Public Offering to open on Friday, 30 June, 2023, sets price band at ₹140 to ₹148 per Equity Share

(L-R) Mr. Pravin Kumar Agarwal, CMD, Mr. NP Sharma, CFO, PKH Ventures, Mr. Ashish Pattjoshi, EVP & Mr. Subodh Gandhi, SVP, IDBI Capital at the IPO press meet)

• Price Band of  ₹ 140 – ₹ 148 per equity share bearing face value of  ₹ 5 each (“Equity Shares”)
• Bid/Offer Opening Date – Friday, 30 June, 2023 and Bid/Offer Closing Date – Tuesday, 4 July, 2023.
• Minimum Bid Lot is 100 Equity Shares and in multiples of 100 Equity Shares thereafter.
• The Floor Price is 28.00 times the face value of the Equity Share and the Cap Price is 29.60 times the face value of the Equity Share.

Risks to Investors:

• Our Company plans to infuse funds by way of equity in our Subsidiary, Halaipani Hydro Project Private Limited for development of Hydro Power Project of  ₹ 12,411.90 lakhs from the Fresh Issue proceeds. We have no experience of developing and operating a hydro power plant. Further, the hydro power project is subject to risks like floods, cloudburst, landslides and such environmental risks.
• We intend to utilise ₹ 4,000 lakhs from the Net Proceeds for inorganic growth through acquisitions and other strategic initiatives, for which we have not yet identified any target and have not yet entered into any definitive agreements.
• The Offer consists of an Offer for Sale of 73,73,600Equity Shares by the Promoter Selling Shareholder which is 28.77% of the total offer size. Our Company will not receive any proceeds from the Offer for Sale by our Promoter Selling Shareholder.
• The segmental revenue as % of total revenue for the nine months ended December 31, 2022 and in Fiscal 2022, Fiscal 2021 and Fiscal 2020 as per the Restated Consolidated Financial Information is as under:

Business Segments	Dec 31, 2022	FY 2022	FY 2021	FY 2020
Construction and Development	61.24%	46.68%	47.26%	NIL
Hospitality and Sale of Food Products	30.66%	38.50%	15.84%	33.31%
Management Services	7.29%	14.79%	36.25%	62.70%
Other Operating Revenue	0.81%	0.03%	0.65%	3.99%

We derive significant revenues from the Construction & Development vertical and our financial condition would be materially and adversely affected if we fail to obtain new contracts or our current contracts are terminated. Further, we derive our Hospitality revenues mainly from Sale of Food Products. Any adverse developments affecting our Sale of Food Products business could have an adverse effect on our business, results of operations and financial condition

• Our Company has entered into revenue sharing agreements with our Promoter and Group Companies for certain properties owned by them and which are managed and operated by our Company. In the event of any dispute with our Promoter/Group Companies, the above agreements may be terminated which may adversely affect our financial condition, cash flows and results of operations.
• Our business operation requires significant working capital specifically under Construction and Development vertical which will be funded out of the Net Proceeds and remaining by internal accruals. If we experience insufficient cash flows to meet required payments on our working capital requirements, there may have an adverse effect on our financial condition and results of operations
• The Weighted Average Cost of Acquisition of all Equity Shares transacted in three years, eighteen months and one year preceding the date of the RHP:

Period	Weighted Average Cost of Acquisition* (in ₹)	Upper end of the price band (₹ 148) is 'X' times the weighted average cost of acquisition	Range of acquisition price: Lowest Price - Highest Price* (in ₹)
Last one year	Nil	-	Nil
Last eighteen months	Nil	-	Nil
Last three years	15.56	9.51	15.0 – 16.00

*Weighted average cost of acquisition has been computed for two transactions after considering the impact of the corporate actions: bonus issuance and sub-division of equity shares made by the Company.

• The BRLM associated with the Offer has handled 2 public offers in the past three Fiscal Years, out of which1 offer closed below its offer price on the listing date.

Name of BRLM	Total Issues	Issues closed below IPO Price on listing date
IDBI Capital Markets & Securities Limited	2	1

For further details and definitions please refer to the RHP.

•                Select Financial Ratio

Particular	At Floor Price	At Cap Price
Market Capitalisation to Revenue from Operations	5.78	6.11
Enterprise Value to EBITDA	12.50	13.17

Note:

1. Market Capitalisation to revenue from operations ratio has been calculated as market capitalization at floor price/cap price divided by revenue from operations for the financial year ended March 31, 2022, as restated. Market Capitalisation at the floor price/ cap price has been calculated by multiplying the floor price/cap price with expected total outstanding number of equity shares of the company after the completion of the offer calculated respectively at floor price/cap price.
2. Enterprise Value to EBITDA had been calculated at Enterprise Value divided by EBITDA for the financial year ended March 31, 2022, as restated. Enterprise Value of the company is a sum of Market capitalization at the Floor price/ Cap Price (explained above) plus total borrowing less cash and cash equivalent as at March 31, 2022 EBITDA means Earnings before interest, taxes, depreciation and amortization expense.

Mumbai, June 26, 2023: Incorporated in the year 2000 by Pravin Kumar Agarwal, PKH Ventures Limited (“Company”) along with its subsidiaries is in the business of Construction & Development, Hospitality and Management Services and has fixed the price band at ₹140 to ₹148 per Equity Share for its maiden public offer. The initial public offering (“IPO” or “Offer”) of the Company will open on Friday, 30 June, 2023, for subscription and closes on Tuesday, 4 July, 2023. Investors can bid for a minimum of 100 Equity Shares and in multiples of 100 Equity Shares thereafter.

The public issue of up to 2,56,32,000 Equity Shares of face value of ₹5 per Equity Share comprises of fresh issue of up to 1,82,58,400 Equity Shares and an Offer for Sale (OFS) up to 73,73,600 Equity Shares by its Promoter, Pravin Kumar Agarwal.

Under the Construction & Development vertical, the Civil Construction business is executed by its subsidiary Garuda Construction. Garuda Construction is currently executing Civil Construction of six (6) residential projects for Third Party Developers and Promoter Group in the MMR which representing order book of ₹46,827.59 Lakhs as on March 15, 2023. PKH through its subsidiaries has constructed and developed the Delhi Police Headquarters in April 2021 on HAM basis.

Under the Hospitality segment, it owns, manages and operates hotels, restaurants, QSRs, Spas and sale of food products. It owns two hotels in Andheri and Vasai at Mumbai and manage one resort & spa at Aamby Valley, Lonavala. Presently, the Company has total hotel keys of 116 and has potential to add 70 more keys.

The Company has been awarded with two (2) Government Projects (16 MW Hydro Power Project in Arunachal Pradesh and Nagpur Project) and three (3) Government Hotel Development Projects viz., Rajnagar Garhi Project, Pahadikhurd Project and Tara Resort Project in the state of Madhya Pradesh. Further, the Company is proposing to develop Forthcoming Development Projects, which include real estate development at Amritsar, Punjab; real estate redevelopment project at Dadar-Matunga, Mumbai; agro processing cluster at Jalore, Rajasthan; cold storage park/facilities at Indore, Madhya Pradesh; and a wellness centre & resort at Chiplun, Maharashtra.

Under Management Services vertical, the Company provides services for the annual maintenance of the Delhi Police Headquarters.

The Company clocked a profit after tax and non-controlling interest grew 32.55% to ₹4,051.55 lakhs in the financial year FY22 against ₹3,056.67 lakhs in FY21, whereas revenue from operations during the year FY22 stood at₹19,935.20 lakhs. Further, the Profit for the nine-months period ended December 2022 stood at ₹2,863.52 lakhs.

IDBI Capital Markets & Securities Limited is the sole book running lead manager and Link Intime India Private Limited is the Registrar to the Offer. The Equity Shares are proposed to be listed on BSE and NSE. 

RHP Link: https://idbicapital.com/pdf/Red_Herring_Prospectus-PKH_Ventures_Limited.pdf