KRN Heat Exchanger IPO Launches on 25th Sept 24: Price Band ₹209 to ₹220 Per Share

KRN Heat Exchanger and Refrigeration Ltd is a leading manufacturer of fin and tube-type heat exchangers. The company manufactures Copper and Aluminium fins and copper tubes heat exchangers, water coils, condenser coils, and evaporator coils. It manufactures heat exchanger tubes of different shapes and sizes from 5 mm diameter to 7 mm, 9.52 mm, 12.7 mm, and 15.88 mm. All the products offered are used in the domestic, commercial, and industrial Heating, Ventilation, air conditioning and refrigeration (HVAC&R) industry. The company's manufacturing facility is situated in Neemrana, Rajasthan over an aggregated area of 7,800 sq. mt.

The Objectives of the Issue

KRN Heat Exchanger and Refrigeration Limited intends to utilise the Net Proceeds from the Issue towards the following objectives:

1. Invest in the wholly owned subsidiary, KRN HVAC Products Pvt Ltd for setting up a new manufacturing facility at Neemrana, Alwar, Rajasthan
2. General corporate purposes

Highlights of KRN Heat Exchanger IPO

KRN Heat Exchanger IPO is set to launch with a book-built issue of ₹341.51 crores. The issue is entirely fresh. Here are the key details of the IPO:
 

• The IPO opens for subscription on 25th September 2024 and closes on 27th September 2024.
• The allotment is expected to be finalised on 30th September 2024.
• Refunds will be initiated on 1st October 2024.
• Credit of shares to Demat accounts is also expected on 1st October 2024.
• The company will tentatively list on BSE and NSE on 3rd October 2024.
• The price band is set at ₹209 to ₹220 per share.
• The fresh issue comprises 1.55 crore shares, aggregating to ₹341.51 crores.
• The minimum lot size for the application is 65 shares.
• Retail investors need to invest a minimum of ₹14,300.
• The minimum investment for small NII (sNII) is 14 lots (910 shares), amounting to ₹200,200.
• The minimum investment for big NII (bNII) is 70 lots (4,550 shares), amounting to ₹1,001,000.
• Holani Consultants Private Limited is the book running lead manager for the IPO.
• Bigshare Services Pvt Ltd serves as the registrar.

KRN Heat Exchanger IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 27th September 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors are advised to complete their applications well before this deadline to avoid any last-minute technical issues or delays.

KRN Heat Exchanger IPO Issue Details/Capital History

The KRN Heat Exchanger IPO is scheduled from 25th September to 27th September 2024, with a price band of ₹209 to ₹220 per share and a face value of ₹10. The total issue size is 1,55,23,000 shares, raising up to ₹341.51 crores through a fresh issue. The IPO will be listed on BSE and NSE. The pre-issue shareholding is 4,39,99,980 shares.

KRN Heat Exchanger IPO Allocation & Minimum Investment Lot Size

The IPO shares are allocated across different investor categories as follows:

Investors can place bids for a minimum of 65 shares, with additional bids required in multiples of this figure. The table below illustrates the minimum and maximum investment amounts for retail investors and HNIs, expressed in shares and monetary values.

SWOT Analysis: KRN Heat Exchanger and Refrigeration Ltd

Strengths:

• Leading manufacturer of fin and tube-type heat exchangers
• Diverse product range catering to various HVAC&R industry needs
• Strong customer base including prestigious clients
• Export presence in multiple countries
• State-of-the-art manufacturing facility with latest technology

Weaknesses:

• Concentration of manufacturing in one location
• Dependence on specific raw materials like copper and aluminum

Opportunities:

• Growing demand for HVAC&R systems globally
• Potential for expansion into new markets
• Increasing focus on energy-efficient heat exchange solutions

Threats:

• Fluctuations in raw material prices
• Intense competition in the HVAC&R industry
• Economic slowdowns affecting construction and industrial sectors

Financial Highlights: KRN Heat Exchanger and Refrigeration Ltd

Below are the financial results for the Fiscal years FY24, FY23, and FY22:

KRN Heat Exchanger and Refrigeration Limited has shown significant growth in recent years. The company's revenue increased by 25.47%, and profit after tax (PAT) rose by 20.9% between the financial year ending on 31st March 2024 and 31st March 2023.

Assets have shown strong growth, increasing from ₹9,279.19 lakhs in FY22 to ₹25,836.43 lakhs in FY24, representing a growth of about 178% over two years.

Revenue has grown substantially, rising from ₹15,822.53 lakhs in FY22 to ₹31,354.12 lakhs in FY24, marking an impressive increase of 98% over two years.

The company's profitability has improved significantly. Profit After Tax increased from ₹1,059.04 lakhs in FY22 to ₹3,906.86 lakhs in FY24, representing a substantial growth of 269% over two years.

Net Worth has shown strong growth, increasing from ₹2,553.15 lakhs in FY22 to ₹13,164.71 lakhs in FY24, a growth of about 416% over two years.

Total Borrowings increased from ₹2,212.21 lakhs in FY22 to ₹5,969.19 lakhs in FY24, an increase of about 170% over two years. This increase in borrowings, coupled with the significant growth in assets and revenue, suggests that the company is in an expansion phase.

The company's financial performance shows a trend of strong revenue growth and improving profitability. The substantial increase in Net Worth indicates a strengthening financial position. Investors should consider these positive trends, the company's growth strategy, and the evolving HVAC&R market when evaluating the IPO.