KRN Heat Exchanger IPO: Review, Valuation, Date & GMP

KRN Heat Exchanger IPO-Complete Overview

KRN Heat Exchanger IPO a Mainboard IPO is a book-built issue of Rs.341.51 crore (1.55 crore Shares) by KRN Heat Exchanger Ltd. It is a top producer of heat exchangers with fin and tube designs. The company makes water coils, condenser coils, evaporator coils, heat exchangers with copper and aluminium fins, and copper tubes. It produces heat exchanger tubes with a variety of diameters and forms, ranging from 5 mm to 7 mm, 9.52 mm, 12.7 mm, and 15.88 mm. The industries that deal with heating, ventilation, air conditioning, and refrigeration (HVAC&R) in homes, businesses, and industries employ all of the items that are offered.

Among the esteemed clients are Frigel Intelligent Cooling Systems India Pvt Ltd, Kirloskar Chillers Private Ltd, Daikin Airconditioning India Pvt Ltd, Schnieder Electric IT Business India Pvt Ltd, Blue Star Ltd, Climaventa Climate Technologies Pvt Ltd. Additionally, the business exports goods to the United Arab Emirates, the United States, Italy, Saudi Arabia, and Norway, Czech Republic, Germany, UK, and more.

Situated in Neemrana, Rajasthan, the production plant spans an aggregate area of 7,800 square meters. The business makes use of the newest coil manufacturing equipment, such as vertical expanders, CNC tube benders, fin presses, and hairpin benders.

This new IPO is to be launched on 25 September 2024, and the initial public offering of this upcoming IPO will end on 27 September 2024.

 

KRN Heat Exchanger IPO Overview

The Rs.341.51 crore KRN Heat Exchanger IPO comprises an entirely fresh Issue of 1.55 crore Shares out of which 35% is allocated to retail investors, 50% to institutional investors, and 15% to non-institutional investors. 

The KRN Heat Exchanger IPO date is from 25 September to September 27, 2024. The IPO listing date is on Thursday, October 03, 2024, and it will be listed on the BSE and NSE. KRN Heat Exchanger IPO price band is between Rs.209 to Rs.220 for each Share.

 To open a demat account and apply for the IPO, Click Here.

 

KRN Heat Exchanger: Product Portfolio

 

The product line comprises copper header components, sheet metal parts, fluid and steam coils, condensing units, evaporator coils, and condenser coils.

1) Evaporator Coils

They are mostly used to remove heat from the air within buildings and transfer it to the refrigerant that is pumped through copper tubing.

 

2) Condenser Coils

These devices help vapor transition from a vapor to a liquid state by discharging heat into the surrounding air, usually the outdoor air. During this process, the system's refrigerant changes phases and condenses, generating heat energy.

 

3) Fluid and Steam Coils

They are built into Air Handling Units (AHUs) to efficiently catch and transport the warmth or coolness in the air or water, reducing energy waste. These coils are essential to keeping industrial operations and buildings at the proper temperatures and comfort levels.

 

4) Condensing Units and Air-cooling Units

The condensing unit, a critical component in refrigeration systems, is composed of a compressor, condenser coil, and fan motor, all coupled through pipes and enclosed within a sturdy mounting plate or a closed casing.

5) Headers / Copper Parts

The utilization of cutting-edge machines in header production, such as CNC tube benders, CNC end forming, CNC flute punching, and Tube T-drills, helps to ensure the excellent quality of these components.

 

6) Sheet Metal Parts

The company plays a significant role in the HVAC sector as a manufacturer of sheet metal components, producing both standard and custom-designed parts including end plates for in-house assembly of condensing units and evaporator and condenser coils.

 

Company Financial

The KRN Heat Exchanger Limited’s revenue grew by 25.47% and PAT increased by 20.9% between FYs ended 31 March 2024 and 31 March 2023.

(Amount in Crore)

 

KRN Heat Exchanger: Valuation Metrics

 

Revenue Bifurcation

Below is the revenue breakdown for various activities.

(Amount in lac)

 

Product-wise revenue Bifurcation During the Last Three FYs

(Values in lac)

 

State-wise Revenue Bifurcation During the Last Three FYs

(Values in lac)

 

Country-wise Revenue Bifurcation of Sales During the Last Three FYs

(Values in lac)

 

Continent-wise revenue Bifurcation During the Last Three FYs

(Values in lac)

 

 

The Objective of The Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• Invest in KRN HVAC Products Pvt Ltd, the wholly owned subsidiary, to establish a new manufacturing plant in Neemrana, Alwar, Rajasthan.

• Corporate Purposes.

 

Peers of KRN Heat Exchanger Ltd.

There are no listed companies in India engaged in the same business of comparable size.

 

Evaluation

KRN Heat IPO price is between Rs.209 to Rs.220 for each Share.

Evaluation of P/E Ratio

Considering the period of FY 2024, with an EPS of Rs.8.69 from the last year, the resulting P/E ratio is 25.32x.

Considering the weighted EPS of Rs.7.19 for the last three years, the P/E ratio is 30.6x.

Comparative Analysis with Listed Peers

No listed companies. So it is not possible to provide industry comparison.

 

IPO's Strengths 

• Promoters show excellent leadership, and senior management with a wealth of knowledge backs them up.

• Long-term commercial ties with exclusive clients

• Reliable quality assurance inspections

• Stable financial results

• A well-established manufacturing site.

 

IPO’s Weaknesses 

• Mainly relies on its suppliers in China, Malaysia, South Korea, Thailand, Vietnam, and other countries for its raw materials. In the Financial Years 2024, 2023, and 2022, its import purchases made up 78.17%, 79.08%, and 72.16% of the total raw material purchases. The sourcing of its raw materials could be negatively impacted by any nation-related risk or by changes in Government laws regarding the import of commodities or the import of goods from any particular country or region, which could harm its business.

• Revenue risk arises from a heavy reliance on Daikin and its top 10 customers

• In the absence of long-term client contracts, operational unpredictability results

• Raw material availability may be disrupted by a high reliance on leading suppliers

• The corporation is exposed to geopolitical risks due to its reliance on imports from particular nations.

• In the previous fiscal years, it had negative cash flows from investing activities. Constant negative cash flows could affect its cash flow needs.

 

KRN Heat Exchanger IPO GMP Today

KRN Heat Exchanger IPO GMP today is Rs.225 as of 20 September 2024. 

KRN Heat Exchanger IPO Timetable (Tentative)

The KRN Heat Exchanger IPO open date is from September 25 to September 27, 2024, with IPO allotment on September 30, 2024, refund initiation on October 1, 2024, and listing on Thursday, October 3, 2024.

 

KRN Heat Exchanger IPO Details 

The IPO with a face value of Rs.10 per Share is set to start on September 25, 2024, close on September 27, 2024, and offers a total issue size of 15,523,000 Shares between Rs.209 to Rs.220 per Share with a Lot size of 65 Shares and will be listed at BSE and NSE.

KRN Heat Exchanger IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (65 Shares) amounting to Rs.14,300 and 13 Lots (845 Shares) amounting to Rs.1,85,900 respectively, while for HNI investors, the minimum Lot is 14 (910 Shares) amounting to Rs.2,00,200.

 

KRN Heat Exchanger IPO Reservation

Promoters and Management of KRN Heat Exchanger Ltd. 

• Mr. Santosh Kumar Yadav

• Mrs. Anju Devi

• Mr. Manohar Lal.

KRN Heat Exchanger IPO Lead Managers

• Holani Consultants Private Limited

 

Dividend Policy

The company has not paid any dividends in the last three fiscals.

 

Conclusion

Over the past fiscal year(s), the company's investing activities have resulted in negative cash flow. The company is currently holding an IPO for the public to achieve its goals. 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here to Download the DRHP.

Disclaimer: 

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