KRN Heat Exchanger and Refrigeration Limited is set to launch its Initial Public Offering (IPO) from September 25, 2024, to September 27, 2024, with a total issue size of ₹341.95 crores. This IPO comprises a fresh issue of 1.55 crore shares, opening a promising opportunity for retail and institutional investors alike.

Key IPO Details:

• IPO Date: September 25, 2024, to September 27, 2024
• Issue Type: Book Built
• Issue Size: 15,543,000 shares (₹341.95 Crores)
• Price Band: ₹209 to ₹220 per share
• Lot Size: 65 Shares
• Minimum Investment (Retail): ₹14,300
• Listing on: BSE, NSE
• Listing Date: October 3, 2024 (tentative)

Promoters & Shareholding

The promoters of KRN Heat Exchanger and Refrigeration Ltd are Mr. Santosh Kumar Yadav, Mrs. Anju Devi, and Mr. Manohar Lal. The pre-issue shareholding stands at 94.39%, with post-issue shareholding yet to be finalized.

About KRN Heat Exchanger and Refrigeration Limited

Founded in Neemrana, Rajasthan, KRN Heat Exchanger is a leading manufacturer specializing in fin and tube-type heat exchangers. The company produces a variety of products for the domestic, commercial, and industrial HVAC&R (Heating, Ventilation, Air Conditioning, and Refrigeration) industry, including:

• Copper and aluminum fins
• Copper tube heat exchangers
• Water coils
• Condenser coils
• Evaporator coils

Their product range extends to heat exchanger tubes of varying sizes and shapes (from 5mm to 15.88mm in diameter). KRN's esteemed clientele includes industry giants like Daikin Airconditioning India Pvt Ltd, Blue Star Ltd, Schneider Electric IT Business India Pvt Ltd, and Kirloskar Chillers Private Ltd. They also export products globally, serving markets in UAE, USA, Italy, Saudi Arabia, Germany, and more.

The company's state-of-the-art manufacturing facility in Neemrana spans 7,800 sq. mt., equipped with advanced machinery such as Hair Pin Benders, CNC Tube Benders, Fin Press Machines, and Vertical Expanders.

Financial Performance of KRN Heat Exchanger

KRN Heat Exchanger has demonstrated strong financial growth, as evidenced by its financial metrics for the year ended March 31, 2024:

• Assets: ₹258.36 Cr
• Revenue: ₹313.54 Cr
• Profit After Tax (PAT): ₹39.07 Cr
• Net Worth: ₹131.65 Cr
• Total Borrowing: ₹59.69 Cr

The company also posted a significant growth trajectory from the previous fiscal year:

• Assets (March 2023): ₹148.76 Cr (2023) vs ₹92.79 Cr (2022)
• Revenue (March 2023): ₹249.89 Cr (2023) vs ₹158.23 Cr (2022)
• PAT (March 2023): ₹32.31 Cr (2023) vs ₹10.59 Cr (2022)
• Net Worth: ₹59.57 Cr (2023) vs ₹25.53 Cr (2022)

Key Performance Indicators (As of March 31, 2024):

• Market Cap: ₹1,309.51 Cr
• ROE: 40.86%
• ROCE: 31.21%
• Debt/Equity Ratio: 0.45
• Return on Net Worth (RoNW): 29.68%
• PAT Margin: 12.67%

Use of IPO Proceeds

The funds raised from the IPO will be used to:

1. Invest in KRN HVAC Products Pvt Ltd, a wholly-owned subsidiary, to set up a new manufacturing facility in Neemrana, Rajasthan.
2. General corporate purposes.

Anchor Investors

KRN Heat Exchanger IPO raised ₹100.10 crore from anchor investors, with 4.55 million shares offered in this segment. The anchor portion is locked in for 30 to 90 days after listing.

Why You Should Consider Investing

KRN Heat Exchanger has established itself as a leader in the B2B HVAC segment, with strong financial growth and a blue-chip client base that includes Daikin, Blue Star, Voltas, and Carrier Aircon. The company has shown robust performance over the past few years, with promising future growth driven by expansion plans.

While the IPO is fully priced based on the company’s FY24 earnings, it presents a solid investment opportunity for medium to long-term investors, particularly given its strategic expansion in the heat exchanger market.

Conclusion

With strong financials, a well-established global clientele, and an aggressive growth strategy, KRN Heat Exchanger and Refrigeration Limited is poised to make significant strides in the HVAC market. Investors looking for exposure in a growing industrial sector should consider this IPO for their portfolios.