KRN Heat Exchanger IPO: A Comprehensive Review and Analysis
The KRN Heat Exchanger and Refrigeration Limited’s Initial Public Offering (IPO) has garnered significant attention from investors, opening for bidding from September 26th to 30th, 2024. The price band for the IPO has been fixed at ₹209 to ₹220 per equity share, with the company aiming to raise a substantial ₹341.95 crore from this fresh issue. This ambitious target reflects the company’s confidence in its market position and growth potential. The public issue has already received a robust response from investors, indicating strong market interest and confidence in the company’s future prospects. The grey market sentiment for the IPO has also improved significantly, driven by a bullish market trend and positive investor reactions. As of September 30th, the grey market premium (GMP) for the IPO stood at ₹253, which is ₹13 higher than the previous day, suggesting potential high returns for the lucky allottees.
Market observers believe that the rise in grey market sentiment is primarily due to two factors: the strong IPO subscription status and the prevailing bullish trend in the market. The grey market mood is expected to continue improving as the subscription period progresses, reflecting growing investor confidence. Reliance Securities has recommended a ‘subscribe’ rating for the IPO, citing the company’s strong position in the HVAC&R industry and its partnerships with leading players. The company’s consistent profitability and anticipated strong growth in the coming years further bolster this recommendation. Indsec Securities also recommends a ‘subscribe’ rating, noting that the IPO is attractively priced with promising growth opportunities.
The most likely IPO allotment date is September 28th, 2024, with share allocation potentially being announced on September 30th, 2024, if the allotment date falls on a Saturday. Bigshare Services Private Limited has been appointed as the official registrar for the book build issue. According to the ‘T+3’ listing rule, the most likely listing date for the IPO is October 3rd, 2024. This timeline is influenced by the stock market holiday on September 2nd for Mahatma Gandhi Jayanti. It is important to note that the views and recommendations provided in this analysis are those of individual analysts or broking companies and not Mint. Investors are advised to consult with certified experts before making any investment decisions to ensure they align with their financial goals and risk tolerance.
The Rajasthan-based company aims to raise ₹341.95 crore through its maiden offering, consisting of 1.55 crore equity shares with no offer-for-sale component. The IPO is available for public subscription at a price range of ₹209-220 per share. The company has already raised ₹100 crore from anchor investors, reflecting strong institutional interest and confidence in the company’s business model and growth prospects. The allotment for the IPO is expected to be finalized on Monday, September 30th, with the shares likely to list on the BSE and NSE on October 3rd. Holani Consultants Pvt. Ltd. is the book-running lead manager for the IPO, ensuring a smooth and efficient process for all stakeholders involved.
Investors can check the KRN Heat Exchanger IPO allotment status on the Registrar’s website and the BSE website. To do so, they need to visit the Bigshare Services Pvt. Ltd. website and select ‘KRN Heat Exchanger and Refrigeration Limited’ from the list. The selection type can be based on the application number, beneficiary ID, or PAN number. After entering the required information and completing the captcha verification, investors can access their allotment status. As of September 30th, the grey market premium for the KRN Heat IPO is ₹270, implying a 122.73% gain over the IPO price. The estimated listing price based on the GMP is ₹490 per share. However, it is important to remember that the GMP is not an official price quote and is based on speculation.
The funds raised from the IPO will be utilized for various strategic purposes. Approximately ₹242.5 crore will be invested in the subsidiary KRN HVAC Products for setting up a new manufacturing facility in Neemrana, Alwar, Rajasthan. This investment is expected to enhance the company’s production capacity and operational efficiency, supporting its long-term growth strategy. The remaining funds will be used for general corporate purposes, providing the company with the financial flexibility to pursue new opportunities and address any unforeseen challenges. The Rajasthan-based company specializes in manufacturing heat exchangers for the HVAC and refrigeration industry, leveraging its expertise and innovative solutions to meet the evolving needs of its clients.
On September 28, 2024, KRN Heat Exchanger closed its IPO, while another company, Diffusion Engineers, will close its IPO on September 30th. Investors who did not receive an allotment of shares from either company can still buy them in the secondary market. In the grey market, KRN Heat Exchanger’s shares were selling at a premium of 123%, while Diffusion Engineers’ shares were selling at a premium of 35%. This significant difference suggests that KRN Heat Exchanger’s shares are expected to double in value on the day of listing, reflecting strong investor confidence and market demand. The IPO price for KRN Heat Exchanger was set between ₹209 to 220 per equity share, while Diffusion Engineers set the band between ₹159 to ₹168 per equity share, aiming to attract retail investors with a competitive pricing strategy.
KRN Heat Exchanger has established itself as a top player in the heat exchangers market for the HVAC&R industry, utilizing non-ferrous metals like copper and aluminum to deliver high-quality products. The company is led by a first-generation entrepreneur with 19 years of experience in the industry, providing strong leadership and strategic direction. KRN Heat Exchanger boasts a diverse product portfolio and maintains strong relationships with leading clients, positioning itself for significant growth and profitability in the coming years. The company’s innovative approach and commitment to quality have earned it a solid reputation in the market, further enhancing its attractiveness to investors.
Reliance Securities has recommended a ‘subscribe’ rating for the KRN Heat Exchanger IPO, highlighting the company’s strong market position and growth potential. Similarly, Diffusion Engineers, which specializes in manufacturing welding consumables and providing repair and reconditioning services for heavy equipment, has received a ‘subscribe’ rating from Anand Rathi Research. Diffusion Engineers is valued at a P/E of 20.4x and has a market cap of ₹629 crore, indicating a fair valuation and promising growth prospects. Investors are encouraged to seek expert advice on the potential gains and portfolio-building strategies, leveraging resources like the Financial Express app to stay informed about the latest stock market news and brokerage bets.
The Financial Express app also provides valuable information on Nifty 50 and BSE Sensex levels, helping investors make informed decisions based on real-time market data. In addition to financial news, the app covers significant events in other sectors, such as the recent announcement of Bollywood legend Mithun Chakraborty receiving the prestigious Dadasaheb Phalke award for his contributions to Indian cinema. This decision has generated excitement among fans and the film industry, with Information & Broadcasting Minister Ashwini Vaishnaw praising Chakraborty’s cinematic journey and legacy. Such updates add a cultural dimension to the financial news, offering a well-rounded perspective to readers.
In conclusion, the KRN Heat Exchanger IPO presents a compelling investment opportunity for those looking to capitalize on the company’s strong market position and growth potential. With a robust response from investors, a significant grey market premium, and positive recommendations from leading securities firms, the IPO is poised for success. However, as with any investment, it is crucial for investors to conduct thorough research and consult with certified experts to ensure that their investment decisions align with their financial goals and risk tolerance. By staying informed and leveraging available resources, investors can navigate the complexities of the stock market and make strategic decisions that contribute to their long-term financial success.