IPO listed on 3 Oct'24
KRN Heat Exchanger & Refrigeration Ltd
Minimum Investment
₹ 14,300 / 65 shares
Grey market premium
₹ 270 (123% premium)
Issue price
₹ 220
Listing price
₹ 480
Listing gains
260 (118%)
Listing on
Oct 3, 2024
Our Verdict:
Subscribe
- KRN Heat Exchanger & Refrigeration Ltd (KRN) has shown significant growth in its financial metrics over recent years, setting a positive trend for the future. With solid return ratios and ongoing expansion plans, the firm is expected to enhance its performance in coming years.
- In terms of valuations, the IPO seems reasonably priced with a price-to-earnings (P/E) ratio of 25x based on FY24 earnings. Additionally, the grey market premium (GMP) for the issue suggests a solid market debut on the bourses.
- Given the fair valuations, impressive growth metrics, strategic expansion initiatives and strong industry tailwinds, investors may consider subscribing to this IPO from a medium-term perspective.
About the company
Founded in
25 Aug'17
Managing director
Santosh Kumar Yadav
- KRN is a leading manufacturer of fin and tube type heat exchangers specifically tailored for the heat ventilation air conditioning and refrigeration (HVAC&R) industry. It uses non-ferrous metals like copper and aluminum to produce its products.
- KRN offers customized heat exchangers in various shapes and sizes, adapting to customer needs and market demands, with tube diameters ranging from 5 mm to 15.8 mm. Their extensive product line includes condenser coils, evaporator units, evaporator coils, header/copper parts, fluid and steam coils, and sheet metal parts designed for diverse cooling applications.
STRENGTHS
- Strong Financial Growth: KRN has demonstrated significant growth, with its operational revenue and net profit achieving compounded annual growth rates (CAGRs) of 41% and 92%, respectively, from FY22 to FY24.
- Solid Return Metrics: KRN’s financial efficiency is highlighted by impressive return metrics, with a Return on Equity (RoE) of 40.86% and a Return on Capital Employed (RoCE) of 31.21% in FY24.
- Healthy Profit Margins: As of March 31, 2024, KRN reported EBITDA and Net Profit Margins of 18.96% and 12.67%, respectively.
- Marquee Clientele: KRN has developed strong relationships with leading firms such as Daikin Airconditioning, Schneider Electric, Kirloskar Chillers, Blue Star, Climaventa Climate Technologies, and Frigel Intelligent Cooling Systems.
RISK FACTORS
- Client Concentration: KRN's revenue concentration is high, with its top 1, 5, and 10 customers representing 33%, 55%, and 72% of its total operational revenue as of FY24, respectively. This dependency on a limited number of clients exposes the company to significant risk if there is a reduction or delay in orders.
- No End-User Product: If any of the key customers begin manufacturing heat exchangers internally, KRN could lose a crucial revenue stream and face more competition.
- Legal Risks: Arkade is currently entangled in various legal disputes involving its directors and promoters. Adverse rulings in these legal matters could damage the company's reputation and financial stability.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 341.95 crore
Fresh Issue
₹ 341.95 crore
OFS
₹ -
Price range
₹ 209 - 220
Lot size
65 shares
Issue Objective
KRN intends to use the net proceeds from the issue for the following purposes:
- Invest in a wholly-owned subsidiary for setting up a new manufacturing facility in Rajasthan; and
- General corporate purposes.
Dates
Bidding open
25 Sep'24
Bidding close
27 Sep'24
Allotment date
30 Sep'24
Refund date
1 Oct'24
Listing
3 Oct'24
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
This document has been issued by Liquide Solutions Private Limited for information purposes only. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek personal and independent advice regarding the appropriateness of investing in any of the funds, securities, other investment or investment strategies that may have been discussed or referred herein and should understand that the views regarding future prospects may or may not be realized. In no event shall Liquide Life Private Limited and / or its affiliates or any of their directors, trustees, officers and employees be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of information / opinion herein.