Introduction to KRN Heat Exchanger’s IPO
KRN Heat Exchanger and Refrigeration Limited, a key player in the HVAC&R industry, is launching its Initial Public Offering (IPO) from September 25 to September 27, 2024. This IPO is a significant step for the company as it aims to enhance its market presence and attract a broader investor base.
Company Background
Founded in 2017, KRN Heat Exchanger and Refrigeration Limited specializes in manufacturing fin and tube-type heat exchangers, including condenser coils and evaporator units. With over 20 years of collective engineering experience, KRN provides customized solutions that meet international quality standards, positioning itself as a trusted name in the HVAC&R sector.
The primary objectives of the IPO are to:
- Fund a new manufacturing facility in Alwar, Rajasthan, which is expected to increase production capacity and reduce costs.
- Allocate funds for general corporate purposes, enabling the company to expand its operations and strengthen its market position.
IPO Details and Objectives
- Opening and Closing Dates: The IPO will open on September 25, 2024, and close on September 27, 2024, with anchor investor bidding on September 24, 2024.
- Issue Structure: The company is offering 1.55 crore equity shares as a fresh issue, with no offer-for-sale (OFS) component, indicating that the IPO is primarily focused on raising capital for growth rather than shareholder divestment.
Here’s a detailed tabular form summarizing the KRN Heat Exchanger and Refrigeration Limited IPO details based on the information available up to September 17, 2024:
| Aspect | Details |
|---|---|
| IPO Dates | Opening: September 25, 2024 Closing: September 27, 2024 |
| Issue Type | Fresh Issue of 1,55,23,000 equity shares |
| Face Value | ₹10 per share |
| Issue Size | 1,55,23,000 shares (aggregating up to ₹341.5 Cr) |
| Price Band | Not specified in the provided data, but typically set before the IPO opens |
| Retail Allocation | 35% of the issue |
| HNI Allocation | 15% of the issue |
| QIB Allocation | 50% of the issue |
| GMP (Grey Market Premium) | Latest GMP reported as ₹225 |
| Financial Performance (FY23) | – Revenue: ₹250 Cr – PAT: ₹32 Cr |
| Financial Performance (FY24) | – Revenue: ₹313 Cr – PAT: ₹39 Cr |
| Purpose of Issue | – Funding a new manufacturing facility – General corporate purposes |
| Lead Manager | Holani Consultants |
| Registrar | Bigshare Services |
| Listing | Expected on both NSE and BSE |
| Application Method | ASBA (Application Supported by Blocked Amount) |
| Allotment Date | September 30, 2024 |
| Credit of Shares | October 01, 2024 |
| Minimum Investment | ₹14,300 (65 shares/Lot) |
| Market Position | Focuses on fin and tube-type heat exchangers for HVAC&R industry |
| Product Range | Includes condenser coils, evaporator units, and various heat exchanger types |
| Manufacturing | Operations at RIICO Industrial Area, Neemrana, Rajasthan |
This table encapsulates the key aspects of the KRN Heat Exchanger and Refrigeration Limited IPO, providing potential investors with a quick overview of what to expect from the issue. Remember, for the most current details, especially regarding price bands, final issue size, or any changes, one should refer to the latest updates from the company or the stock exchanges.
Financial Performance
- Revenue Growth: KRN has demonstrated impressive financial growth, with revenue reaching ₹16,064.24 lakh in 2023, reflecting a CAGR of 48.34% over the last three years.
- Profitability: The company’s key financial metrics for FY23, including ROCE, ROE, PAT margin, and EBITDA margin, showcase strong operational efficiency and market demand.
Here’s a concise tabular representation of KRN Heat Exchanger and Refrigeration Limited’s financials for the financial year ending March 31, 2024:
| Financial Metric | Amount (₹ Crore) |
|---|---|
| Assets | 258.36 |
| Revenue | 313.54 |
| Profit After Tax (PAT) | 39.07 |
| Net Worth | 131.65 |
| Total Borrowing | 59.69 |
Key Observations:
- Revenue: ₹313.54 crore, indicating the company’s total income or sales for the year.
- Profit After Tax (PAT): ₹39.07 crore, showing the profit after all taxes have been paid.
- Net Worth: ₹131.65 crore, which represents the shareholders’ equity, calculated as total assets minus total liabilities.
- Total Borrowing: ₹59.69 crore, reflecting the company’s total debt, which could include loans, bonds, or other forms of borrowed capital.
This snapshot provides a quick overview of KRN Heat Exchanger and Refrigeration Limited’s financial health at the end of the fiscal year 2024, highlighting its operational performance, profitability, and financial structure.
KRN Heat Exchanger and Refrigeration Limited IPO GMP and Subscription
Given today’s date is September 27, 2024, here’s an updated scenario for KRN Heat Exchanger and Refrigeration Limited’s IPO:
Grey Market Premium (GMP) for Today: As of today, the GMP for KRN Heat Exchanger has surged significantly, with reports indicating a premium of over 124%, translating to a GMP of approximately ₹274. This suggests that shares are trading at around ₹494 in the grey market, reflecting strong investor confidence and expectations.
IPO Subscription Status as of Today (Last Day of IPO):
- Overall Subscription: The IPO has been overwhelmingly received, with subscription rates soaring to over 210 times by its final day, showcasing exceptional demand far exceeding initial expectations.
- Category-wise Subscription:
- Retail: Subscription in this category has been massive, reported at around 93.65 times, indicating robust retail investor interest.
- NII (Non-Institutional Investors): This segment has witnessed the highest subscription, with figures over 428 times, reflecting strong backing from this category.
- QIB (Qualified Institutional Buyers): Subscription here was also significant, at 253 times, showing substantial institutional interest despite typically being more reserved.
Market Sentiment Analysis:
- Final Day Scenario: The closing day has intensified the buzz on platforms like X, with sentiments overwhelmingly positive, focusing on the potential listing gains which are speculated to be in the range of 85% to 90% or even higher based on the GMP.
- Adjusted GMP: The considerable increase in GMP over the IPO days reflects not only investor confidence but possibly speculative trading based on the sector’s growth narrative and KRN Heat Exchanger’s strategic positioning.
Investment Considerations:
- Long-term vs. Short-term Gains: While short-term gains look promising due to the high GMP, long-term investment would depend on KRN Heat Exchanger’s ability to maintain its growth trajectory, expand its market, and adapt to evolving technologies in the HVAC&R sector.
- Market Dynamics: The exceptionally high subscription might fuel further optimism, but there’s also a narrative suggesting a potential correction after listing due to high valuations or any unforeseen sector-specific challenges.
- Sentiment on X: Posts on X range from celebrating the subscription figures as a clear market validation to discussions on potential sectoral risks like raw material price volatility or competition from established players.
Given this updated scenario:
- Stay Updated: With such dynamic changes, staying updated with real-time information, especially towards the end of the IPO window and post-listing, is crucial.
- Diversification: While the IPO’s performance is encouraging for investment, consider it within a diversified investment strategy to mitigate sector-specific risks.
- Fundamental Analysis: Beyond market sentiment, delve into KRN Heat Exchanger’s business model, financial health, and growth strategies for a more informed investment decision, especially given the sector’s cyclical nature and technological advancements.
Remember, while these details reflect current market sentiment and behaviors around KRN Heat Exchanger’s IPO, always complement this information with direct checks on financial news platforms or market analysts for the most current insights.
KRN Heat Exchanger and Refrigeration Limited IPO EPS and PE Ratio
Based on the information gathered from various sources up to September 24, 2024, regarding KRN Heat Exchanger and Refrigeration Limited’s IPO:
- EPS (Earnings Per Share): The EPS for FY24, as reported for pre-IPO conditions, was approximately ₹8.69. However, this figure might not directly translate post-IPO due to changes in the total number of shares after the fresh issue.
- PE Ratio: The calculation of the PE ratio based on the provided EPS would vary depending on the price at which one values the stock. Given the price band for the IPO was set at ₹209 – ₹220:
- At the lower end of ₹209, the PE ratio would be approximately ₹209 / ₹8.69 ≈ 24.05.
- At the higher end of ₹220, the PE ratio would be approximately ₹220 / ₹8.69 ≈ 25.32.
These calculations are based on the assumption that the EPS mentioned applies directly to the post-IPO scenario, which might not be the case due to the increase in the number of shares post-IPO.
However, there’s an inconsistency in some of the data from X posts where a higher GMP suggests market expectations or speculation might imply a significantly higher listing price, which would naturally affect the PE ratio if taken into account.
Risks and Considerations
The HVAC&R market is growing rapidly, driven by increasing demand in the residential, commercial, and industrial sectors. KRN’s focus on quality and customization allows it to stand out in this competitive landscape. The company competes with major players such as Blue Star, Voltas, and Daikin, but its niche offerings provide a unique value proposition.
- Market Risks: Like any IPO, the success of KRN’s listing will depend on market conditions and sustained demand in the HVAC&R sector.
- Competitive Risks: While KRN has strong fundamentals, it faces competition from well-established players such as Carrier and LG, which could pose a challenge.
Conclusion
The KRN Heat Exchanger and Refrigeration Limited IPO offers an exciting investment opportunity in a rapidly expanding sector. With solid financials, a clear growth strategy, and a focus on quality, KRN is poised to capitalize on the rising demand for HVAC&R solutions. For investors looking for long-term growth in the industrial and residential cooling sectors, KRN could be a valuable addition to their portfolio.
FAQs
- How can I check the IPO allotment status? You can check the status by logging into your broker’s app or visiting the registrar’s website.
- What are the key financial highlights of KRN? The company has shown strong revenue growth, profit margins, and impressive growth rates.
- What is the purpose of the IPO funds? The funds will primarily be used for setting up a new manufacturing unit and other general corporate purposes.
Disclaimer
Investing in IPOs involves risks, and it is essential to conduct thorough research or consult with a financial advisor before making investment decisions. This blog provides information based on the latest available data but does not constitute investment advice.
Pingback: Exploring KRN Heat Exchanger and Refrigeration Limited: A Deep Dive into Innovation in Thermal Solutions - IPO Now