Hospitality and construction firm PKH Ventures joins growing IPO queue

PKH Ventures Ltd, a company that undertakes businesses in three verticals—construction and development, hospitality and management services, is looking to raise money from the primary markets.

The Mumbai-based company has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India to sell a total of 2.927 crore shares in its initial public offering (IPO). This comprises a fresh issue and an offer for sale of 50 lakh shares by its promoter Pravin Kumar Agarwal. According to market sources, the company plans to raise about Rs 500 crore.

The company could also consider a pre-IPO placement of 25 lakh shares. If it does so, it will reduce the number of shares in the fresh issue by the same amount.

PKH Ventures plans to use Rs 135.94 crore out of the fresh proceeds to invest in Halaipani Hydro Project Pvt Ltd for the development of a hydropower project.

It also intends to use Rs 100 crore to invest in Makindian Foods Pvt Ltd towards the development of a construction project in Amritsar and Rs 60 crore for funding in Garuda Construction for funding its working capital requirements.

PKH Ventures’s business and financials

The comany was incorporated in 2000 by Pravin Kumar Agarwal. It began with offering management services at several airports. Currently, PKH Ventures operates its business under three broad verticals—construction and development, hospitality and management services.

The debt-averse company largely manages its fund requirements through internal accruals. Its debt-to-asset ratio stood at 0.16 as on March 31, 2021.

Its construction and development projects include residential, commercial buildings and miscellaneous construction projects. These include the Amritsar project in Punjab, the Halaipani hydropower plant in Arunachal Pradesh, a food park at Jalore in Rajasthan, an entertainment centre at Nagpur in Maharashtra, a cold storage project near Indore in Madhya Pradesh and a wellness centre and resort at Chiplun in Maharashtra.

At present, the company has 11 projects under development and looks to focus on build-operate-transfer and hybrid annuity model (HAM) projects.

The company owns and operates two hotels and manages one resort and spa at Aamby Valley, Lonavala. Additionally, it owns and operates the restaurants Balaji, Golden Chariot, Casablanca and manages and operates restaurants under the brand name Zebra Crossing, Hardy’s Burger and Mumbai Salsa.

The company’s order book as of September 24, 2021 stood at Rs 1,174 crore. Its consolidated revenue from operations for 2020-21 stood at Rs 241.51 crore, up from Rs 165.89 crore the year before. Consolidated net profit for the period stood at Rs 30.57 crore versus Rs 14.09 crore last year.