Krishca Ltd : A SME offering steel strapping Solution

Hi, I have not attended the meeting personally. Someone who attended the call has forwarded the notes. But we can ask the management regarding welding business in the H1Fy24 concall.

Thanks

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this was made under the guidance of @sahil_vi

one interesting thing to note is, all the companies grew upwards of 40% in 2022

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Company has received its first packing contract for 2crs (a significant milestone) and decided to post quarterly results from Dec onwards as an investor friendly initiative…

Thanks

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Hi,

Couple of questions:

  1. What is the HS code for their products?
  2. how long is ADD applicable on imports from china?

Thanks

It will take them at least 3 years to list on the mainboard. However, the lot size is reviewed every 6 months. Next review’s changes will come into effect in October. Lot size should come down then.

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Hi Everyone,
(Thanks everyone for very good information out here with correct unbiased explanations)

I was following the Krishca from the day when IPO was there.
From all the information out in public domain I could see all good points are highlighted and communicated quiet well on all the platforms (excluding here, pro’s con’s both discussed).
From the Concall I could understand the business model is good and management seems to be good.
But one point where I see the Red Flag is Shareholding has not been published out to public yet after the IPO from past three months.
I don’t know what are the rules to publish this after IPO, after much tracking I could see on 11-July they submitted it to NSE but that too which was pre-IPO one.
NSE Report
Company Site
I could see Spectrum, Oriana (with in few days of listing) all have updated on there portal at least.
Any opinions or experience in this regard will really help. For me Shareholding is one of the very crucial factor, to decide long term investment strategy.

@nikhil_chowdhary @nityanandparab @Rahil_Dasani @Vallinayagam
Do you have some information about the rules related to post shareholding, post IPO when it’s a must to be published.
Any senior members who have a good knowledge about the rules and procedures, I tried my luck finding articles on web but couldn’t find. Any Guidance will help here, where to find this type of information.

I would strongly recommend to read the latest AR of the company to understand its business more in detail. Promoter has explained its moat, future growth plans (including international expansion), and intention to enter welding consumables business.

AR is a treat to the eye and doesn’t feel like it belongs to a 200cr SME company. Seems the promoter is way ahead of the curve and knows how to scale the company to big heights in coming future.

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These are my observation on the AR-2023

  • Spyromax turnover hasn’t been specified and hence its become difficult to asses whether the paid price can be justified or not. Moreover this comes in RPT
  • Trade payables has rose by 8x.Trade payables schedule falling under <1 year has shot up by 3x.
  • Inventory has shot up by almost 7x whereas revenue by <4x and almost 70% of it sitting under finished goods.
  • Receivables has shot up by 2x. In view of the revenue growth, this can be ignored and 22% of it sitting in <6 months schedule
  • Leaving the IPO expense, Auditor fees is up by 3x.
  • For 2022, Balamanikandan shareholding has been shown as just .21%.
  • CWIP schedule has 1.4cr component lying in 1-2 years bucket, when most assets come into production in an years time

Disclosure: Not invested.

Even though, I thought of investing when it came into my screener, didnt invest in because of the lot size. Now because of the above observation will give it more time

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As mentioned by @fundoo and @Rudresh sir there has been significant points which they had noticed, but there were some anomalies (may be a printing mistake) which I think can be ignored but a company giving something out in writing should check especially with the figures

  • Reporting top 5-10 customers contributions in FY’s. FY-22 was misprinted to FY-23 (SMALL ONE CAN BE IGNORED)
  • Reporting the figure of the fund which was raised in IPO as stated The Company raised Rs. 17,928 Lakhs through IPO which is 179.28 Crore but it was 17.928 Crore
    Krishca Annual Report 2022-23- Anomalies IPO.pdf

Krishca today investor meeting notes:

1/ Co has won multiple packing contracts in last 2 weeks. Expects 10-15 crs contribution from packing contracts in FY24. Already hired an experienced industry leader to head packing contracts business. Packing contracts will have same margins as strappings

2/ Upcoming strapping capex is funded by internal accruals. They may look for preferrential equity raise to fund Dubai capex in future

3/ Guiding for 40% growth on conservative basis for next 2 years

4/ Promoter clarified that they gave pre ipo stake at cheaper valuation to a strategic investor. This makes sense as the growth in revenues were 4x within an year (18cr to 72cr) once the investor got on board

5/ promoter mentioned that their business is niche and any new player will take atleast 2 years to get approvals and quality control from clients

Call was attended by multiple fellow valuepickrs @ayushmit @DEBASHISH @Rahil_Dasani etc

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for me the most important point was that the machines used by KRISHCA for manufacturing their products are custom made and not readily available, KRISHCA themselves imported the machines from outside.

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Upcoming strapping capex is coming in eastern part?

No its coming in chennai itself. Eastern part capex will come after they finish dubai capex

Is this the 12cr capex they are doing with ipo money aur different one ?

Yes. Same… It will be live from December onwards

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https://nsearchives.nseindia.com/corporate/KRISHCA_29092023172653_OutcomeoftheBM29092023.pdf

Krishca incorporates subsidiary in Singapore for business expansion. This is an interesting development and new information for me as I was only aware of their international expansion in Dubai.

If someone has any info on this then please share otherwise will get to know in H1 concall.

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Krishca has posted e-voting and agm result. Anybody who wants to get an idea about their shareholding pattern can look into it.

https://nsearchives.nseindia.com/corporate/KRISHCA_01102023000928_KRISHCA06AGMVOTINGRESULTS2023.pdf

Promoter Holding is 62.59 % and 37.40 % is the Public Non institution holding. Public Institutions doesnt hold any shares as of now. Thanks for suggesting a way to find out the share holding pattern. This is a learning for me today. @Snowman

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Hi, from where did you get the packing contract order receipt info?