Has Kent RO Secured SEBI Approval for IPO Amid Mixed Financial Results?
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Synopsis
Kent RO Systems has obtained SEBI's approval for its IPO, marking a significant advancement despite its fluctuating financial performance. With a remarkable profit increase in FY24, the company faces challenges due to previous losses. Explore the details of its financial journey and IPO plans.
Key Takeaways
- Kent RO Systems has received SEBI approval for its IPO.
- Profit surged to Rs 166.5 crore in FY24.
- Company faced a 37% profit drop in FY23.
- Total income for FY24 rose to Rs 1,260.6 crore.
- IPO consists of 10.1 million shares offered by promoters.
Mumbai, June 12 (NationPress) Kent RO Systems, a prominent water purifier manufacturer, has received the green light from the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO). This development marks a significant achievement for the company, although its financial history presents a mixed picture with certain concerns.
Kent RO's most recent financial records indicate a notable profit increase in FY24, following a steep decline in the previous fiscal year (FY23).
The company's profit surged to Rs 166.5 crore for the year ending March 31, 2024, up from Rs 97.1 crore in FY23.
Although this reflects an impressive growth of approximately 71 percent, it is crucial to recognize that profits had previously fallen by more than 37 percent in FY23 compared to Rs 154.2 crore in FY22.
The company's overall expenses also increased by 6.42 percent year-on-year (YoY), rising from Rs 976.9 crore in FY23 to Rs 1,039.6 crore in FY24.
According to the draft red herring prospectus (DRHP), Kent RO reported operational revenue of Rs 1,178.1 crore for FY24, compared to Rs 1,084.3 crore in the preceding fiscal year.
This signifies a growth of around 8.65 percent YoY. Total income for FY24 was Rs 1,260.6 crore, an increase from Rs 1,109.1 crore in FY23, representing a 13.65 percent rise.
For the six-month period ending September 30, 2024, Kent RO achieved operational revenue of Rs 637.1 crore and total income of Rs 684 crore.
During this timeframe, the company reported expenses of Rs 594.6 crore and a profit of Rs 69.6 crore, according to the DRHP.
The IPO, structured as a pure offer for sale (OFS), will involve the sale of 10.1 million shares by promoters Sunita Gupta, Mahesh Gupta, and Varun Gupta.
As it is not a fresh issue, Kent RO will not benefit financially from this public offering.
The draft was submitted to SEBI on January 23, with approval received on June 6. The IPO price range has yet to be announced.
JM Financial and Motilal Oswal Investment Advisors will serve as the book-running lead managers, while KFin Technologies will act as the registrar for the issue.
Point of View
It's crucial to acknowledge the advancements Kent RO Systems has made by gaining SEBI approval for their IPO. While the company shows signs of recovery with profit increases, the past financial instability raises questions about future sustainability. An unbiased perspective suggests that while the approval is promising, potential investors should remain vigilant about the company's financial health.
NationPress
14/06/2025
Frequently Asked Questions
What is Kent RO Systems?
Kent RO Systems is a leading manufacturer of water purifiers in India, known for its innovative technology and commitment to providing clean drinking water.
What does SEBI approval mean for Kent RO?
SEBI approval allows Kent RO to proceed with its IPO, offering shares to the public, which can enhance capital for future growth.
What are the financial highlights for FY24?
Kent RO reported a profit of Rs 166.5 crore in FY24, with operational revenue of Rs 1,178.1 crore, indicating a recovery from previous losses.
What is an OFS?
An OFS, or Offer for Sale, allows existing shareholders to sell their shares to the public, rather than issuing new shares.
Who are the lead managers for the IPO?
JM Financial and Motilal Oswal Investment Advisors are acting as the book-running lead managers for Kent RO's IPO.
