Krishna Defence IPO

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(i) Krishna Defence is engaged in the diversified business of manufacturing defence application products, dairy equipment products and kitchen equipments. They have entered into various licensing agreement with Defence Research and Development Organisation (“DRDO”) for obtaining the know-how and rights which enable them to manufacture and supply specialized defence application products for the Indian Armed Forces.

(ii) Under defence application

They provide a wide array of high performance products for naval applications and other utilities such as ship building steel bulb bar, special steel alloy bricks used as ballast weight for critical applications, super alloys weld consumables like welding wire, flux and electrodes, food container and improved space heating device, which is also known as bukhari.

In the year 2006, Krishna Defence IPO attempted for the first time to develop ship Building Steel Bulb Bars which was a very critical component for the Indian Navy’s indigenization program and the attempt successfully yielded the result in the trial batch exactly as per the requirement of the Indian Navy. They received appreciation certificate from Defence Metallurgical Research Laboratory (DMRL), Hyderabad for successfully carrying out the project of manufacturing the indigenized steel Bulb Bars which are used in hull construction of Naval warships.

Over the years the Company was awarded Transfer of Technology for manufacture and sale of various defence application products to be supplied to Indian Armed forces like: 5.5 Ltr Plastic Food Container for Extreme Cold Condition, Space Heating Device (Bukhari) used at high altitude in very Cold conditions, Man Mounted Cooling Krishna Defence and Allied Industries Limited 118 System to be used in extremely Hot Conditions as well as cold conditions, Solar Snow Melter to be used at high altitude, Improvised Explosive Device (IED) Containment Vessel to be used for protection and Mounting & support Equipment for Camouflage Net.

(iii) Under Dairy Equipment

In 1997, they started the operations in the dairy equipment manufacturing as a partnership firm, M/s Krishna Industries and over the years the company has developed a wide range of dairy equipment products such as stainless steel milk Cans, Milk Cooling Tanks or Bulk Milk Coolers, Milking Machine, Cow Brooming Brush and Robotic Milk Collection Unit.

The Company achieved a new milestone in 2015 in the dairy industry after acquiring patent for invention of automated milk analysis and collection apparatus called Robotic Milk Collection Unit (RMCU) upto to the year 2035. The developed product works like a kiosk for Milk Collection for Milk Society, and it analyzes the farmer milk not only for Fat & SNF but also tests the milk for adulteration. The RMCU ensures only top-quality milk is collected by the Milk Society and below par milk or adulterated milk is rejected.

(iv) Under Kitchen Equipment

In the year 2010, they stretched its operations into the business of manufacturing Kitchen Equipment and commenced manufacturing of Bulk Cooking Equipment like Rice Cauldron, Dal Cauldron, Braising Pan, Distribution Vessels, Rice Chute, Dal Storage Tank, which are used by organizations which run Midday Meal Programs where cooking is done for up to 1,00,000 meals a day.Presently they are supplying products to The Akshayapatra Foundation.

(v) Homeland and Security Products

In the year 2020, the Company has also forayed in a new business vertical of manufacturing and marketing of Homeland & Security products, wherein they plan to manufacture products like Modular Vehicle Barrier, Automatic tyre Killer, Multi-purpose Launcher and Long Range LED Searchlight used by the Indian Armed Forces, for which they have entered into agreements with foreign vendors for import of critical component required to manufacture/assemble these products in the factory.

(vi) Manufacturing Facilities in Gujarat

Krishna Defence IPO have two manufacturing facilities in Gujarat, located at Kalol and Halol district near Vadodara. The manufacturing facilities are accredited with ISO 9001:2015 quality management system as manufacturer and exporter of stainless-steel milk cans, milking machine, milk coolers, dairy and kitchen Equipment, milk testing Equipment, Galley Equipment, shipbuilding steel bulb bars, modular vehicle barrier & automatic tyre killer.

(viii) Revenue growth of Krishna Defence IPO

a) FY21= 20 Crores, FY20= 35 Crores and FY19 = 25 Crores – Revenue

b) FY21= 1.22 Crores, FY20= 1.93 Crores and FY19 = 0.74 Crores – PAT

Objects of the Krishna Defence IPO:

The Issue includes a fresh Issue of up to 30,48,000 Equity Shares of our Company at an Issue Price of Rs. 39 per Equity Share. We intend to utilize the proceeds of the Issue to meet the following objects: - 1. To meet Working Capital requirements 2. General Corporate Purpose 3. To meet issue expenses

Krishna Defence IPO Details:

Open Date: Mar 25 2022
Close Date: Mar 29 2022
Total Shares: 3,048,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Building
Issue Size: 11.89 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 37-39 Per Equity Share
Listing At: NSE Emerge
Listing Date: Apr 06 2022

Promoters And Management:

(i) Mr. Ankur Ashwin Shah Age: 43 Years Designation: Managing Director Experience: 22 years Qualifications: Bachelor of Engineering (Production) (ii) Mr. Sandeep Ramrao Kadam Age: 47 Years Designation: Whole Time Director Experience: 25 years Qualifications: Bachelor of Engineering (in Mechanical) (iii) Mr. Suvendu Banerjee Age:48 Years Designation: Whole-time Director Experience: 25 years Qualifications: Bachelor of Science

Financials of Krishna Defence IPO:

Particulars (in Lakhs) Sep-21 Mar-21 Mar-20 Mar-19
Sales 2,072 3,503 2,499 5,838
Cost of Material Consumed 422 739 1,106 1,080
Purchases of Stock-In-Trade 493 286 481 2,985
Changes in Inventories -92 602 -958 -231
Employee Benefits Expense 408 635 741 679
Other Expenses 543 783 780 784
Operating Profit 298 458 349 541
OPM % 14.38% 13.07% 13.97% 9.27%
Other Income 27 116 73 53
Interest 88 172 170 177
Depreciation 70 140 140 129
Profit before tax 166 262 113 288
Total Tax Exps 44 69 39 82
Net Profit 122 194 75 206
NPM % 5.89% 5.54% 3.00% 3.53%
No. of shares 114.48 114.48 114.48 114.48
EPS in Rs 1.45 2.31 0.89 2.46

Comparison With Peers:

As per DRHP company do not have any listed peers in the market.

Recommendation on Krishna Defence IPO:

Review and Recommendation of Krishna Defence IPO by InvestorZone is 4/10 1. Krishna Defence 70% revenue comes from defence and 30% dairy and kitchen equipment manufacturing business. In defence they make products like : bulb bars, food container, improved space heating device or bukhari, improvised explosive device (IED) containment vessel, man mounted cooling system, solar snow melter and mounting and support equipment for camouflage net. These are not very critical products to be used in the defence. 2. The revenue is declining from the last 3 years. No growth in business. Negative for krishna Defence IPO. 3.  IPO is priced at P/E of 23x which looks over-priced.

Lead Manager of Krishna Defence IPO:

  1. Hem Securities Limited

Registrar of Krishna Defence IPO:

  1. Bigshare Services Private Limited

Company Address:

Krishna Defence and Allied Industries Limited 344, Floor-3, Plot-267, A To Z Industrial Estate, Ganapatrao Kadam Marg, Lower Parel, Delisle Road, Mumbai, Maharashtra, 400013 Phone: +91 22 4220 3800/99 Email: Website

Discussion on Krishna Defence IPO:


    Greetings !!

    We are pleased to invite you to the Virtual Brokers’ and Analysts’ meet of *Krishna Defence and Allied Industries Ltd*, to announce the company’s forthcoming SME Book Building IPO, scheduled on Wednesday , *March 23, 2022 at 4:00PM*.

    Here is the Zoom Webinar Link for the same:

    RHP Link:

    HEM Securities Limited
    Ms. Heena Kapupara : 8976961772
    Ms. Prachi Ghia : 9004574614

    Balance Sheet Analysis of Krishna Defence IPO

    1. Debt (30.06.2021) = 23 Crores
    2. Equity (30.06.2021) = 19 Crores
    3. D/E = 1.21x
    4. Current Ratio. = 1.64 ( anything above 1.5x is good)
    5. Trade Receivables Days = 132 Days. ( Very high)…. Though it has reduced from 206 Days in FY19.

    So, balance sheet is not looking very strong.

    Cash Flow from Operations Analysis of Krishna Defence IPO

    FY21 = 3 Cr

    FY20 = 7 Cr

    FY19 = 2 Cr

    So, in the last 3 years, company has generated ~12 Crores of cash from operations.

    Valuation of Krishna Defence IPO

    1. Total Shares Outstanding before IPO = 84,00,000
    2. Total shares to be issued in IPO = 30,48,000
    3. Total Shares outstanding after IPO = 114,48,000
    4. PAT (FY21) = 1.93 Crores
    5. EPS = 1.70
    6. P/E = 23x ( looks overvalued)

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