Krishna Buildspace Limited IPO

01At a glance

What the company does — design, engineering and construction of buildings and related works on an end-to-end basis, with three subsidiaries covering electrical and wastewater work (DRHP p.33, DRHP p.223, DRHP p.266). It has executed 82 projects across 8 states in the last decade, worth ₹6,392.54 million (DRHP p.223).

Who pays it — public sector undertakings were 78.74% of revenue in the six months to September 2025, up from 49.86% in FY23 (DRHP p.37). The top ten customers were 93.54% of revenue, and Gujarat 40.74% (DRHP p.38).

Why it is raising money — ₹800.00 million for working capital, ₹52.00 million for equipment and machinery, and the rest for general purposes (DRHP p.34).

How fast it has grown — revenue from ₹1,647.61 million in FY23 to ₹1,832.87 million in FY25, and ₹959.53 million in the six months to September 2025 (DRHP p.35).

The one thing to understand — a contractor whose profits are tied up in receivables. Net working capital days rose from 66 in FY23 to 171 in the six months, ₹151.90 million of receivables were more than six months past due, and operating cash flow totalled negative ₹180.03 million from FY23 to September 2025 against ₹427.53 million of profit (DRHP p.37, DRHP p.152, DRHP p.418, our arithmetic).

02The business, in plain words

A building contractor bids for construction projects, designs and builds them with its own teams and subsidiaries, and bills the client as work progresses. Clients hold back retention money and require bank guarantees, and public bodies often pay late.

A public sector undertaking tenders for a new institutional campus → Krishna Buildspace bids lowest and wins → it designs, builds and fits out the buildings, with electrical and plumbing work by its subsidiaries → it bills stage by stage and waits for the client to certify and pay.

The company had ₹375.79 million of bank guarantees outstanding at September 2025 (DRHP p.38). It began as the partnership firm Krishna Developers, and the summary says it was established in 1995 (DRHP p.33, DRHP p.122).

Earnings equation: Profit ≈ work billed × (contract margin) − interest on working capital. EBITDA was 17.50% of total income in the six months (DRHP p.152).

03Where the money comes from

Source: DRHP p.225. Infrastructure makes up the rest. H1 FY26 is six months.

Source: DRHP p.37, DRHP p.38.

04The growth record

Source: DRHP p.35, DRHP p.152, DRHP p.418. H1 FY26 is six months. EBITDA margin, measured on total income, rose from 9.46% in FY23 to 17.50% (DRHP p.152).

05What the growth is made of

Margin more than volume. Revenue grew 11% from FY23 to FY25 while profit doubled (our arithmetic, DRHP p.35). The mix moved from industrial to institutional work, and towards PSU clients (DRHP p.37, DRHP p.225). The order book has since shifted the other way: private-sector clients were 65.69% of the ₹4,649.62 million order book at September 2025, up from 25.98% in FY23 (DRHP p.232, DRHP p.233).

06Earnings quality

Profit is not turning into cash. Across FY23 to September 2025 the company reported ₹427.53 million of profit and negative ₹180.03 million of operating cash flow (our arithmetic, DRHP p.35, DRHP p.418). Trade receivables were ₹543.84 million at September 2025, of which 27.93% was more than six months past due (DRHP p.37). There are no auditor qualifications that have not been given effect in the restated accounts (DRHP p.36).

07The balance sheet

Source: DRHP p.35, DRHP p.36, DRHP p.152.

Cash and cash equivalents were ₹4.67 million at September 2025 (DRHP p.418).

08What the money is for

Source: DRHP p.34.

09Who is selling

Source: DRHP p.34. Together they offer up to 900,000 shares; the split was not read for this study (DRHP p.33).

10Promoters

The promoters are Sandip Mohanbhai Sorathia, Harsukhbhai Oghadbhai Bhanderi, Pankajbhai Haribhai Bhanderi, Pravinbhai Chanabhai Sorathia, Mohanbhai Chanabhai Sorathiya and Jayantibhai Chanabhai Sorathia (DRHP p.33). One criminal proceeding involving ₹6.00 million is pending against the promoters (DRHP p.37).

11Who already owns it

Source: DRHP p.34, DRHP p.129. The first row is our arithmetic.

12What changed just before the IPO

• Bonus issue — 28 bonus shares for each share held, allotted on 17 October 2025 (DRHP p.121).
• Private placement — 1,450,621 shares at ₹81 on 20 November 2025, about ₹117.5 million, 1,234,567 of them to Priyanka Shwetkumar Koradiya (DRHP p.122, our arithmetic).
• Shareholders' agreement — a share subscription and shareholders' agreement dated 15 November 2025 (DRHP p.266).
• Order book — ₹5,241.74 million across 19 ongoing projects at 15 December 2025 (DRHP p.38, DRHP p.223).

13Capacity and expansion

Capacity is site teams, equipment and working capital. The proceeds fund working capital and ₹52 million of equipment (DRHP p.34). The book-to-bill ratio was 1.68 in FY25 (DRHP p.152).

14Market size and industry structure

The ICRA report cited in the offer document says India's construction market grew at 15.6% a year from FY2021 to FY2025 and projects 7.9% a year from FY2026 to FY2030 (DRHP p.33). Those projections are ICRA's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• An integrated model — design through execution in-house, with subsidiaries for specialised work (DRHP p.33, DRHP p.223).
• A track record — 82 projects over the last decade (DRHP p.223).

Against that: dependence on competitive tenders and ten customers, one state for 41% of revenue, slow collections, and a Gujarat road-and-building department order against its contractor registration (DRHP p.37, DRHP p.38, DRHP p.55).

16Peers the company named

Source: DRHP p.151. Peer P/E uses prices on 17 December 2025.

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Tenders. Most projects are won by competitive bidding (DRHP p.37).
• PSU dependence. 79% of recent revenue (DRHP p.37).
• Receivables. 28% more than six months overdue (DRHP p.37).
• Customers. Ten customers were 94% of revenue (DRHP p.38).
• Gujarat. 41% of revenue (DRHP p.38).
• Registration. A state order placing its road-and-building registration in abeyance, stayed by the High Court (DRHP p.55, DRHP p.56).

18Litigation and regulatory matters

Source: DRHP p.36, DRHP p.37. In May 2024 the Navsari division of Gujarat's Road and Building Department issued a show-cause notice over security deposits not furnished on four works awarded in 2021, and in August 2024 placed the company's 'AA' class registration in abeyance and barred new road and building works for three years; the company challenged this in the Gujarat High Court, which has granted interim relief (DRHP p.55, DRHP p.56). The company says the order covers road works in Gujarat that are not part of its current order book (DRHP p.56).

19Related-party transactions

Not read in detail for this study. The document lists related-party transactions among its top ten risks (DRHP p.38).

20What the offer document does not say

In the sections read for this study, the document does not give:

• Who the ten customers are, which together provide over 90% of revenue.
• Which PSU accounts are overdue, and why receivables past six months rose to ₹151.90 million.
• Who Priyanka Shwetkumar Koradiya is, or what the November 2025 shareholders' agreement grants, in the pages read.
• What the criminal proceeding against the promoters concerns, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Which customers make up the top ten, and how quickly does each pay?
2. What are the ₹151.90 million of receivables more than six months overdue, and how much is disputed?
3. Why has operating cash flow been negative in two of the last four periods while profit rose?
4. What rights does the November 2025 shareholders' agreement give the new investors?
5. How will the order book's shift to private clients change margins and payment terms?

1Sources and cited facts

This study was read from 1 document the company filed. The 27 figures it cites are listed under the document each came from, with the page and the sentence as printed.