The initial public offering (IPO) of KRN Heat Exchanger and Refrigeration Ltd has garnered an extraordinary response from investors, marking a significant milestone in its public issue that concluded on September 27, 2024.
Subscription Status
As of the final day of bidding, the KRN Heat Exchanger IPO was subscribed a staggering 76.54 times, with investors placing bids for 63,91,84,780 shares against the 1,09,93,000 shares offered.
The non-institutional investors (NIIs) category saw the highest subscription, with bids coming in 135.82 times the allocated shares. Retail individual investors (RIIs) also showed strong interest, subscribing 55.50 times their allocated portion. However, the qualified institutional buyers (QIBs) category was relatively subdued, with a subscription of 3.16 times.
The grey market premium (GMP) for KRN Heat Exchanger shares has been exceptionally high, indicating strong market sentiment. As of the last day of bidding, the GMP stood at Rs 274, suggesting a potential listing gain of 124.55% over the issue price.
Analysts' Recommendations
Several brokerage firms have recommended subscribing to the IPO, citing the company's strong growth prospects and attractive valuations. Deven Choksey Research, Reliance Securities, and Stoxbox, among others, have highlighted the company's strategic position in the HVAC&R industry, its expansion plans, and the growing demand for energy-efficient solutions.
"KRN Heat Exchanger is strategically poised for sustained growth within the HVAC&R industry, leveraging its comprehensive manufacturing capabilities in heat exchangers, condenser coils, evaporator units, and related components," stated Deven Choksey Research.
Use of Proceeds
The company plans to utilize the net proceeds from the IPO to invest in its wholly-owned subsidiary, KRN HVAC Products, for setting up a new manufacturing facility at Neemrana, Alwar, in Rajasthan. The remaining funds will be used for general corporate purposes.
Key Dates
- **IPO Period:** September 25 to September 27, 2024.
- **Share Allotment:** Expected to be finalized by September 30, 2024.
- **Listing Date:** Tentatively scheduled for October 3, 2024, on both BSE and NSE.
Company Overview
KRN Heat Exchanger and Refrigeration Ltd, based in Bhiwadi, Alwar, Rajasthan, specializes in manufacturing fin and tube-type heat exchangers for the HVAC&R industry. The company has established itself as a top player in this sector, known for its quality and innovation, and has strong partnerships with leading industry players.
Financial Performance
In FY24, the company reported a revenue of Rs 308.30 crore, with a significant 25% year-on-year growth. The net profit after tax rose by 22% to Rs 39 crore during the same period. KRN Heat Exchanger also boasts an impressive EBITDA margin of 19% and strong return ratios, despite high working capital days.
The overwhelming response to the KRN Heat Exchanger IPO reflects the market's confidence in the company's growth potential and its strategic initiatives in the expanding HVAC&R sector. As the company prepares for its listing on October 3, investors are eagerly anticipating the debut of this promising player in the Indian stock market.
