KRN Heat Exchange IPO: The initial public offering (IPO) of leading fin and tube-type heat exchanger manufacturer KRN Heat Exchanger and Refrigeration Limited was subscribed over 58 times on the second day of issue. The mainboard IPO of the Rajasthan-based company opened for subscription on Wednesday, September 25, 2024 and will close on September 27, 2024.
KRN Heat Exchanger IPO's issue size is worth ₹342 crore. KRN Heat Exchanger IPO has reserved not more than 50 per cent of the shares in the public issue for qualified institutional buyers (QIB), not less than 15 per cent for non-institutional Institutional Investors (NII), and not less than 35 per cent of the offer is reserved for retail investors.
On the second day of issue, KRN Heat Exchanger IPO was subscribed 58.17 times. According to BSE data, the portion reserved for QIBs was booked 3.16 times, the portion reserved for NIIs was booked the highest at 135.85 times, and the portion reserved for retail investors was booked 55.53 times. The IPO received 63,94,11,630 share applications against 1,09,93,000 shares offered on Thursday. On the first day of subscription, the issue was subscribed 24.09 times.
KRN Heat Exchange IPO GMP today or grey market premium is +274. This indicates that KRN Heat Exchange share price was trading at a premium of ₹274 in the grey market, according to investorgain.com
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of KRN Heat Exchange shares was ₹494 apiece, which is 124.55 per cent higher than the IPO price of ₹220. 'Grey market premium' indicates investors' readiness to pay more than the issue price.
KRN Heat Exchange IPO comprises a fresh issue of 15,543,000 equity shares. There is no offer-for-sale component in the issue. The price band has been fixed at ₹209 to ₹220 per equity share with a face value of ₹10. The lot size is 65 equity shares; thereafter, it will be in multiples of 65 equity shares.
The floor price is 20.90 times the face value, and the cap price is 22 times the face value of the equity shares. The price-to-earnings ratio based on diluted EPS for the financial year 2024 at the upper price band is 25.32 times, compared to the Nifty 50 PE ratio of 22.90 times.
The company, in consultation with the book-running lead manager (BRLM), undertook a pre-IPO placement of 4,77,000 equity shares for cash consideration aggregating ₹954 lakhs. 4,57,000 equity shares have reduced the issue size. Holani Consultants Private Limited is the lead manager for the KRN Heat Exchanger IPO, and Bigshare Services Pvt Ltd is the registrar for the issue.
Also Read: KRN Heat Exchanger IPO Day 2: GMP, subscription status, review, other key details. Apply or not?
Tentatively, KRN Heat Exchanger IPO basis of allotment of shares will be finalised on Monday, September 30, and the company will initiate refunds on Tuesday, October 1, while the shares will be credited to the demat account of allottees on the same day following refund. KRN Heat Exchanger share price is likely to be listed on BSE and NSE on Thursday, October 3.
The company plans to use the proceeds from the Fresh Issue to finance an investment in its wholly-owned subsidiary, KRN HVAC Products Private Limited, by providing equity. This investment will establish a new manufacturing facility in Neemrana, Alwar, Rajasthan. The remaining funds will be allocated for general corporate purposes.
“The IPO's valuation is considered fair, although there is no listed peer for comparison. Given its strong fundamentals and potential for listing gains, investors may consider subscribing this IPO for listing gain as well as for long term,” said Shivani Nyati, Head of Wealth at Swastika investmart Ltd.
The company's promoters are Santosh Kumar Yadav, Anju Devi, and Manohar Lal. Santosh Kumar Yadav and Anju Devi collectively possess 4,39,99,960 equity shares, which accounts for 94.39 per cent of the company's issued, subscribed, and paid-up equity share capital. The company has no competitors in India engaged in a similar line of business.
The firm produces heat exchangers with fins and tubes for the HVAC (heat, ventilation, air conditioning) and refrigeration industries. It mostly uses copper and aluminium as non-ferrous metals for its heat exchangers. The company's product line comprises sheet metal components, header/copper parts, evaporator units, evaporator coils, and fluid and steam coils.
