KRN Heat Exchanger Shares Soar 118% on Market Debut

KRN Heat Exchanger’s Spectacular Stock Market Debut

KRN Heat Exchanger and Refrigeration made an extraordinary debut on the stock exchanges on Thursday, October 3rd, surpassing all market expectations. The stock is listed at Rs 480 on the National Stock Exchange (NSE), soaring 118% above its IPO issue price of Rs 220. The company also marked its entry on the Bombay Stock Exchange (BSE) at Rs 470, reflecting a 114% premium.

The impressive listing was notably higher than the grey market premium estimates, which had projected a 113% premium. This performance underlined the substantial investor interest in the IPO and signaled strong confidence in the company’s potential.

A Well-Received IPO with Substantial Investor Interest

KRN Heat Exchanger’s IPO was met with overwhelming enthusiasm, garnering a subscription rate of 214.42 times. This robust response was largely driven by non-institutional investors who placed heavy bids, reflecting their belief in the growth prospects of the company. Such an enormous subscription ratio places the KRN IPO among the highly sought-after market offerings in recent times.

The IPO offered a fresh issue of 1.55 crore equity shares at a fixed price band of Rs 209 to Rs 220 per share, raising a total of Rs 342 crore at the upper price band. Of this, Rs 242.5 crore will be allocated for investment in KRN HVAC Products, a wholly-owned subsidiary, for setting up a new manufacturing facility in Neemrana, Rajasthan. The remaining funds will be used for general corporate purposes, strengthening the company’s balance sheet and expanding its operational capacity.

Expanding Manufacturing Capabilities and Industry Footprint

KRN Heat Exchanger, based in Rajasthan, manufactures fin and tube-type heat exchangers used in heat ventilation, air-conditioning, and refrigeration (HVACR) industries. The company operates its entire manufacturing from a consolidated facility located in the RIICO Industrial Area in Neemrana, Rajasthan.

With the capital raised, KRN plans to invest in expanding its manufacturing capabilities. A new facility in Neemrana is in the pipeline, further enhancing the company’s production capabilities to meet rising demand. This expansion marks an important milestone for KRN, positioning it as a key player in the HVACR industry in India.

Strong Partnerships and Financial Performance

KRN Heat Exchanger has established strong relationships with prominent players in the HVACR space, such as Daikin Air Conditioning India Pvt Ltd, and Schneider Electric IT Business India Pvt Ltd. These long-standing partnerships have helped the company strengthen its market presence and boost its reputation in the industry.

Financially, KRN has been showing promising growth. For the financial year ending March 31, 2024, the company reported a net profit of Rs 39.07 crore with revenue of Rs 313.54 crore, compared to a net profit of Rs 32.31 crore and revenue of Rs 249.89 crore in FY 2022-23. This growth in revenue and profit indicates strong operational efficiency and robust market demand for its products.

Pre-IPO Placement and Fund Utilization

In addition to its IPO, KRN undertook a pre-IPO placement round last month, raising Rs 9.54 crore by issuing 4.77 lakh equity shares at Rs 200 per share. These funds were mainly raised from individual investors, demonstrating strong interest in the company even before the official IPO launch.

Curious about where to invest next? Our Upcoming IPO could be your answer. Be the first to get in on the action. Start investing today!

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.