KRN Heat Exchanger IPO: Opens 25 September – Check Details
KRN Heat Exchanger IPO
KRN Heat Exchanger IPO: Opening on 25 September – Comprehensive Insights into the Company’s Business, Financial Health, and Fund Utilization
The upcoming initial public offering (IPO) of KRN Heat Exchanger and Refrigeration Limited, a prominent player in the heat exchanger manufacturing sector, is scheduled to open for subscription on 25 September 2024.
This highly anticipated IPO offers a unique investment opportunity for stakeholders interested in participating in a growing company within the HVAC&R industry.
Investors will have a window to subscribe to the issue until 27 September. The price band for the IPO is expected to be disclosed later this week.
Notably, there will be a one-day anchor investor portion on 24 September, allowing key institutional investors to participate before the general subscription period.
IPO Details and Structure
The IPO will see the issuance of 1.55 crore fresh equity shares by KRN Heat Exchanger and Refrigeration Limited.
Importantly, this public offering does not include an Offer for Sale (OFS), meaning that no existing shares held by current shareholders will be sold.
Instead, all proceeds from the IPO will be directed towards the company’s growth and expansion initiatives. This structure allows the company to retain all funds raised for its planned projects.
Use of Proceeds
The primary allocation of the IPO proceeds will be towards the development of a new state-of-the-art manufacturing facility in Alwar, Rajasthan.
This facility will be established through KRN HVAC Products, a subsidiary dedicated to the production of HVAC components.
The company plans to invest approximately Rs 242.46 crore in this new manufacturing plant. This investment is expected to significantly enhance the company’s production capacity and operational efficiency.
As of mid-July 2024, KRN Heat Exchanger had already invested Rs 36.44 crore towards the establishment of this facility, reflecting the company’s commitment to this project.
The remaining funds from the IPO will be utilized for general corporate purposes, which may include working capital requirements, research and development, and other strategic initiatives aimed at supporting the company’s growth and operational objectives.
Following the IPO, KRN Heat Exchanger’s equity shares will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Holani Consultants is appointed as the sole book-running lead manager for the issue, overseeing the overall process and ensuring its smooth execution.
Bigshare Services has been designated as the registrar to the offer, handling all aspects related to the management of applications and allotments.
Pre-IPO Placement and Issue Size
In preparation for the IPO, KRN Heat Exchanger and Refrigeration recently completed a pre-IPO placement, raising Rs 9.54 crore.
This was achieved through the issuance of 4.77 lakh equity shares at a price of Rs 200 per share. This pre-IPO placement has led to a reduction in the number of shares to be offered in the public issue.
Assuming the upper price band of Rs 200 per share, the total size of the IPO is estimated to be around Rs 310 crore, reflecting the company’s significant capital-raising ambition.
Company Overview and Business Model
KRN Heat Exchanger and Refrigeration Limited, headquartered in Rajasthan, is a leading manufacturer specializing in the production of fin and tube type heat exchangers.
These products play a crucial role in the heating, ventilation, air conditioning, and refrigeration (HVAC&R) sectors.
The company’s product range includes condenser coils, evaporator units, evaporator coils, header/copper parts, fluid and steam coils, and various sheet metal components.
The company’s products are integral to the operations of several prominent clients, including Daikin Airconditioning India, Schneider Electric IT Business India, Kirloskar Chillers, Blue Star, Climaventa Climate Technologies, and Frigel Intelligent Cooling Systems India.
These clients rely on KRN’s high-quality components to ensure the efficiency and effectiveness of their HVAC&R systems.
KRN Heat Exchanger’s business model is centered on providing customized solutions to meet the specific needs of its diverse clientele.
The company’s manufacturing facility in Rajasthan is equipped with advanced technology and machinery, allowing it to produce high-quality products that meet international standards.
This focus on quality and customer satisfaction has enabled KRN to establish strong relationships with major players in the HVAC&R industry.
Financial Performance and Growth
KRN Heat Exchanger and Refrigeration has demonstrated impressive financial performance over recent years. For the fiscal year ending March 2024, the company reported a notable 20.9% increase in profit, reaching Rs 39 crore.
This growth in profitability reflects the company’s ability to enhance its operational efficiency and market presence.
Revenue also saw a substantial rise, growing by 24.6% to reach Rs 308.3 crore in FY24, compared to Rs 247.5 crore in the previous fiscal year.
This increase in revenue underscores the company’s robust market position and its successful expansion efforts. The strong financial performance highlights KRN Heat Exchanger’s potential for continued growth and its attractiveness to potential investors.
Investment Considerations
Investing in KRN Heat Exchanger’s IPO presents an opportunity to be part of a company with a solid track record and promising growth prospects.
The planned investment in a new manufacturing facility is expected to significantly enhance the company’s production capabilities and support its future expansion.
Additionally, the absence of an Offer for Sale means that the entire proceeds from the IPO will be used to fuel the company’s growth, potentially leading to increased shareholder value.
Investors should consider KRN Heat Exchanger’s strong financial performance, growth trajectory, and strategic initiatives when evaluating this investment opportunity.
The company’s established relationships with key clients and its focus on quality and innovation further strengthen its position in the HVAC&R market.
Final Remarks
KRN Heat Exchanger and Refrigeration Limited’s IPO, opening on 25 September 2024, offers a compelling investment opportunity for those interested in the HVAC&R sector.
With a planned investment of Rs 242.46 crore in a new manufacturing facility, strong financial performance, and a solid business model, KRN is well-positioned for future growth.
Investors are encouraged to review the company’s detailed prospectus and consult with financial advisors to make informed investment decisions.
