KRN Heat Exchanger IPO sees strong response on day 1. Issue was subscribed within 14 minutes of opening. A look at the fundamentals and key risks.
KRN Heat Exchanger IPO Day 1: The IPO launched on September 25 was subscribed within 14 minutes of opening on the very first day. The IPO was booked to a total of 11.45 times more than the offered shares. The retail category was booked 12.32 times. The NII segment was booked a bit over 24 times.
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KRN Heat Exchanger IPO Day 1: Key Details
The KRN Heat Exchange IPO is open for bidding between September 25- 27 and the price band for the issue is between Rs 209-220 per share . The company aims to raise Rs 342 crore fresh capital through sale of 1.55 crore fresh shares. The allotment of shares is expected to be finalised by September 30. The listing is likely to be scheduled on October 03 on both BSE, NSE. A retail buyer will have to bid for as little as one lot, containing 65 shares amounting to Rs 14,300.
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KRN Heat Exchanger IPO Day 1 GMP
The shares of KRN Heat Exchanger are seeing a premium of 108% in the grey market. It is an unregulated market to trade shares illegally. Essentially the grey market premium gives investors an idea about the counter’s relative standing. A more than 100% premium in GMP indicates that investors are confident about the issue and keen about investing in the issue.
About KRN Heat Exchanger
KRN Heat Exchanger and Refrigeration manufactures fin and tube-type heat exchangers. The company is in the manufacturing of copper and aluminium fins, copper tube heat exchangers, water coils, condenser coils, and evaporator coils. All the products offered by the company are used in the domestic, commercial, and industrial heating, ventilation, air conditioning and refrigeration (HVAC&R) industry.
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Key risks in KRN Heat Exchanger
Some of the key risks as in this issue, as listed in the DRHP include-
Dependence on few customers– More than 30% of its revenue is derived from one customer – Daikin Airconditioning India and over 70% of the revenue is from 10 key customers. Delay or cancellation of orders by any one or all of the top customers could have an adverse effect on business
Revenue worries– Revenue from operations from last three years has been increasing at 25.46% CAGR. However, the company has said that if it is unable to sustain or manage the growth rate, business operations and results may be adversely affected, and the rate of growth may not be achievable in the future.
Margin concerns- The PAT for the company in past three financial years has been increasing at 54.52%. However, in case it is not able to sustain these levels, it might be a source of worry.
BRLM and Registrar
Holani Consultants was the book-running lead manager of the IPO, while Bigshare Services was the registrar for the issue.
