Unlisted shares of KRN Heat Exchanger and Refrigeration Ltd are trading Rs 274 higher in the grey market, signalling a 124.55 per cent listing gain from the public issue.
KRN Heat Exchanger and Refrigeration IPO: The initial public offering of KRN Heat Exchanger and Refrigeration Ltd is going to be closed on Friday. The price band of the Rs 341.95-crore IPO has been fixed at Rs 209 to Rs 220 per share for the public issue. Till 11:03 am on the final day of bidding on Friday, the IPO received a 76.05 times subscription garnering bids for 83,60,16,870 shares as against the 1,09,93,000 shares on offer.
The category for non-institutional investors received 192.01 times subscription, while the portion for retail individual investors (RIIs) got subscribed 66.12 times. The QIB category received a 4.54 times subscription.
Rajasthan-based KRN Heat Exchanger and Refrigeration manufactures fin and tube-type heat exchangers for the heat ventilation air conditioning and refrigeration industry.
The IPO was opened for public subscription on September 25. It received 26.11 times subscription on Day 1 and 58.55 times on Day 2 of bidding.
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KRN Heat Exchanger IPO: Key Dates
The IPO will remain opened for public subscription between September 25 and September 27. The share allotment of the KRN Heat Exchanger IPO will likely be finalised on September 30, while its shares will be listed on both BSE and NSE on October 3.
KRN Heat Exchanger IPO: Price Band
The price band of the Rs 341.95-crore IPO has been fixed at Rs 209 to Rs 220 per share for the public issue.
KRN Heat Exchanger IPO: GMP Today
According to market observers, unlisted shares of KRN Heat Exchanger and Refrigeration Ltd are trading Rs 274 higher in the grey market than its issue price. The Rs 274 grey market premium or GMP means the grey market is expecting a 124.55 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
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KRN Heat Exchanger IPO: Analysts’ Recommendations
SMIFS in its IPO note said the HVAC market in India is on a strong growth trajectory, fueled by rapid urbanization, rising disposable incomes, and the increasing need for energy-efficient solutions amidst changing climatic conditions. The Indian HVAC industry is expected to expand from $10.4 billion in FY24 to $20.6 billion in FY29. Given the current high dependency on the top 10 customers to generate significant sales, the company intends to focus on deepening its penetration in existing markets and expanding its customer network. This aims to reduce dependency on existing customers, mitigate related risks, and provide an opportunity to tap into new markets. The company has onboarded 48 new customers in FY24 compared with 44 in FY23 and 43 in FY22.
“We recommend to subscribe to the issue as a good long-term investment as the current valuations seem attractive given the huge capex the company is doing vis-a-vis current capacity, add to that the focus on exports further bolstering growth prospects & air-conditioning seeing the best growth among consumer durables in India over the next decade and improving margins leading to even improved return ratios,” SMIFS said in the note.
Another brokerage firm Stoxbox in its IPO note said the HVAC market in India is on a strong growth trajectory, fuelled by rapid urbanisation, rising disposable incomes, various government initiatives and the increasing need for energy-efficient solutions amid changing climatic conditions. On the back of such development, the company is well equipped to leverage multiple economic and industrial tailwinds, further strengthening its position in the market.
“The issue is valued at a P/E (price-to-earnings ratio) of 25.3 times, on the upper price band based on FY24 earnings, which is deemed fair. Therefore, we recommend a ‘subscribe’ rating for the issue,” analysts at Stoxbox said.
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KRN Heat Exchanger IPO: More Details
KRN Heat Exchanger and Refrigeration Ltd raised Rs 100 crore from anchor investors.
KRN Heat Exchanger’s IPO involves a fresh issue of 1,55,43,000 equity shares valued at Rs 342 crore at the upper end of the price band.
Funds to the tune of Rs 242.5 crore will be used for investment in wholly-owned subsidiary KRN HVAC Products for setting up a new manufacturing facility at Neemrana, Alwar, in Rajasthan and the remaining funds will be used for general corporate purposes.
The Rajasthan-based company manufactures fin and tube-type heat exchangers for the heat ventilation air conditioning and refrigeration industry.
The company’s entire manufacturing operations are carried out at its consolidated manufacturing facility comprising two industrial plots situated in the RIICO Industrial Area, Neemrana, Rajasthan.
Holani Consultants is the sole book-running lead manager to the company’s public issue.
