KRN Heat Exchanger and Refrigeration Limited, a premier manufacturer and exporter specializing in aluminium/copper fins and copper tubes heat exchangers, has officially launched its IPO, signaling significant growth prospects in the HVAC&R industry. With a strong emphasis on quality, KRN caters to renowned OEMs in the heating, ventilation, air conditioning, and refrigeration sectors, reinforcing its reputation in the market.

IPO Details

The KRN Heat Exchanger IPO is a Book Built Issue amounting to ₹341.50 Crores, entirely comprising a Fresh Issue of 155.23 Lakh shares. The subscription period commenced on September 25, 2024, and will close on September 27, 2024. Allotment of shares is expected to be finalized around September 30, 2024, with shares listed on both the BSE and NSE by October 3, 2024.

The share price band for the KRN IPO is set between ₹209 and ₹220 per equity share, with a minimum lot size of 65 shares. Retail investors must invest a minimum of ₹14,300, while High-Net-Worth Individuals (HNIs) need to subscribe for a minimum of 14 lots (910 shares), totaling ₹2,00,200.

The book-running lead manager for this IPO is Holani Consultants Private Limited, while Bigshare Services Private Limited serves as the registrar for the issue.

Market Sentiment

As of 5:00 PM on September 25, 2024, the KRN Heat Exchanger IPO has witnessed impressive demand, subscribing 15.13 times on its first day. The Grey Market Premium (GMP) currently ranges from ₹125 to ₹130, suggesting strong potential for listing gains, although it’s essential to note that GMP is not a definitive indicator of market performance.

Financial Performance

KRN Heat Exchanger's financials exhibit robust growth, with revenues in Fiscal 2024, 2023, and 2022 reported at ₹31,354.12 Lakhs, ₹24,988.51 Lakhs, and ₹15,822.53 Lakhs, respectively. The company's EBITDA for these years stands at ₹5,845.24 Lakhs, ₹4,931.75 Lakhs, and ₹1,693.56 Lakhs. Moreover, the Profit after Tax has also shown consistent growth, with figures of ₹3,906.86 Lakhs, ₹3,231.35 Lakhs, and ₹1,059.04 Lakhs.

For the KRN Heat Exchanger IPO, the pre-issue EPS is ₹8.69, and the post-issue EPS is projected at ₹6.28. The pre-issue P/E ratio is 25.31x, while the post-issue P/E is 35.03x, compared to the industry P/E ratio of 84.98x. These metrics indicate that the IPO is fairly priced within the market context.

Objectives of the IPO

The proceeds from the Fresh Issue will be utilized for:

₹24,246.10 Lakhs for investment in the wholly-owned subsidiary KRN HVAC Products Private Limited to set up a new manufacturing facility in Neemrana, Alwar, Rajasthan.

General corporate purposes.

Recommendation

Given KRN Heat Exchanger's impressive financial track record and the robust demand seen in the IPO, experts recommend investors apply for the KRN Heat Exchanger and Refrigeration Limited IPO for potential listing gains and long-term investment opportunities.

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