KRN Heat Exchanger and Refrigeration Limited, a leading manufacturer specializing in aluminium and copper fins as well as copper tube heat exchangers, recently concluded its Initial Public Offering (IPO) with overwhelming investor interest. The company, which serves renowned OEMs in the HVAC&R industry, opened its IPO subscription on September 25, 2024, and closed it on September 27, 2024, attracting a 110.23x oversubscription on its final day.

KRN Heat Exchanger offered a Book Built Issue worth ₹341.50 Crores, entirely a Fresh Issue of 155.23 Lakh shares. Investors were able to bid within a price band of ₹209 to ₹220 per share, with the minimum lot size being 65 shares. For retail investors, this translated into a minimum investment of ₹14,300, while HNIs were required to invest in 14 lots (910 shares), amounting to ₹2,00,200. The strong subscription numbers and the high Grey Market Premium (GMP), ranging from ₹125 to ₹130, reflect the significant demand for KRN's shares in the market.

Anchor Investors and Allotment Details:

The company successfully raised ₹100.1 Crores from Anchor Investors at ₹220 per share, allocating 45.5 lakh equity shares. This allocation was made from the Qualified Institutional Buyers (QIBs) reservation portion, showcasing the confidence of institutional investors in KRN's growth prospects. The IPO allotment is expected to be finalized on September 30, 2024, and will be available on the registrar's website, Bigshare Services Private Limited. Investors can check their allotment status by following these steps:

Navigate to the IPO allotment status page.

Select "KRN Heat Exchanger & Refrigerator Limited IPO" from the dropdown.

Enter your application number, PAN, or DP Client ID.

Submit the details to view the allotment status.

Utilization of IPO Proceeds:

The company intends to utilize the IPO proceeds for two major objectives:

₹24,246.10 Lakhs will be invested in its wholly-owned subsidiary, KRN HVAC Products Private Limited, for setting up a new manufacturing facility in Neemrana, Alwar, Rajasthan.

The remaining funds will be used for general corporate purposes.

This strategic move will enable KRN Heat Exchanger to expand its production capabilities and meet the increasing demand for its products in the HVAC&R industry.

Financial Performance:

KRN Heat Exchanger has consistently demonstrated robust financial growth. The company's revenues for Fiscal Year 2024 stood at ₹31,354.12 Lakhs, compared to ₹24,988.51 Lakhs in FY23 and ₹15,822.53 Lakhs in FY22. The EBITDA for FY24 was reported at ₹5,845.24 Lakhs, showing significant growth from ₹4,931.75 Lakhs in FY23 and ₹1,693.56 Lakhs in FY22. Similarly, the company's Profit after Tax (PAT) for FY24 increased to ₹3,906.86 Lakhs, up from ₹3,231.35 Lakhs in FY23 and ₹1,059.04 Lakhs in FY22.

Valuation and Market Sentiment:

For this IPO, KRN Heat Exchanger is issuing shares at a pre-issue EPS of ₹8.69 and a post-issue EPS of ₹6.28. The company's pre-issue P/E ratio is 25.31x, while the post-issue P/E ratio stands at 35.03x. KRN's Return on Capital Employed (ROCE) for FY24 is 31.21%, and the Return on Equity (ROE) is 40.86%, indicating the company's strong profitability and efficiency.

The company's Grey Market Premium (GMP) signals potential listing gains of 55% to 60%, driven by strong demand from both retail and institutional investors. Given the company's solid financial performance and the favorable valuation metrics, many analysts recommend that investors apply for the KRN IPO either for listing gains or as a long-term investment.

KRN Heat Exchanger IPO GMP and Subscription Status:

The Grey Market Premium (GMP) for KRN's shares is currently hovering around ₹125 to ₹130, indicating a positive market sentiment. However, it is essential to note that the GMP is purely speculative and should be taken with caution, as the actual listing price may differ.

As of 4:25 PM on September 27, 2024, the live subscription status for the KRN Heat Exchanger IPO showed that it was subscribed 110.23 times, with the retail portion being subscribed 18.43 times and the Non-Institutional Investors (NII) portion subscribed 75.12 times. This strong response from investors reflects their confidence in the company's future growth.

For real-time updates on the KRN Heat Exchanger IPO subscription status, investors can check the BSE website for live data.

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