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JNK India Limited is engaged in the design, manufacture, supply, installation, and commissioning of process-fired heaters, reformers and cracking furnaces. JNK India IPO is a combination of fresh issue of 0.76 crore shares aggregating to Rs 300.00 crores and offer for sale of 0.84 crore shares aggregating to Rs 349.47 crore.

About JNK India IPO:

• Company was incorporated in June 2010 as “JNK India Pvt. Ltd”.
• JNK Global, is a KOSDAQ listed company, is one of the Corporate Promoters, holding 25.79% in the company.
• JNK India Ltd is one of the leading Heating Equipment companies in India.
• JNK India Limited s engaged in the design, manufacture, supply, installation, and commissioning of process-fired heaters, reformers and cracking furnaces.
• The company has diversified into flares and incinerator systems and has been developing capabilities in the renewable sector with green hydrogen. As of December 31, 2023, the company has installed 1 Hydrogen Refueling Station (HRS), at Indian Oil R&D Centre, Faridabad, Haryana. Apart from HRS, the company has the capability to offer customized Solar PV systems of capabilities above 100KW and is in discussions with multiple prospective customers for systems cumulating to over 16 MW.
• One of their manufacturing facilities is located in Multi-Product Special Economic Zone in Mundra, Gujarat,. The production from this is exclusively for export
• As of 31 December 2023, JNK India employed a total of 235 permanent staff.

Financials: Vodafone Idea Limited

JNK India IPO: Anchors

• JNK India raised Rs 195 crore from anchor investors.
• Goldman Sachs, Kotak Mahindra Mutual Fund, HDFC MF, LIC MF, DSP MF, Bajaj Allianz Life Insurance Company, and Aditya Birla Sun Life Insurance Company were among the anchor investors.

JNK India IPO: Salient Points

• Those offloading shares in OFS are promoters Goutam Rampelli, Dipak Kacharulal Bharuka, JNK Heaters Co Ltd, and Mascot Capital and Marketing Pvt Ltd, and shareholder Milind Joshi.
• The heating equipment is required in industries such as oil and gas refineries, petrochemicals, fertilisers, hydrogen, and methanol plants, etc.
• Demand for Heating Equipment from Indian refineries, petrochemicals, and fertilizer (urea) industries approximately INR 4500 crore million on an annualized basis in next few years.
• Further, there has been a rise in the global oil and gas refinery and petrochemical capacities and a total of 53 refineries are expected to be commissioned in 21 countries by calendar year 2030.
• Heating equipment typically accounts for 3.3% of the total capital expenditure of a refinery project
• JNK India’s domestic customers include PSU major Indian Oil Corporation Limited, Tata Projects, RCF, Numaligarh Refinery etc.
• Its overseas markets the customers include a leading EPC company in Europe, a leading oil & gas exploration & production company in Oman and a Middle East arm of European EPC company in oil & gas.
• As of December 31, 2023, JNK India has served 29 customers including 21 in India and 8 overseas. Further, 7 out of the 12 oil refining companies in India, are its customers and the company has supplied or is in the process of supplying Heating Equipment to 11 of the 24 operating oil refineries across India.
• Of the net proceeds from the fresh issue, about Rs 262.69 crore will be utilized for funding working capital requirement and balance towards general corporate purposes.
• JNK India Ltd is one of the leading Heating Equipment companies in India in terms of new order booking between Fiscal 2021 to Fiscal 2023.
• The company’s revenue from operations surged 37.% yoy to Rs 407.30 crore for FY23, net profit went up 29% to Rs 46 crore .
• For the period Fy21-23, company’s top-line grew at a CAGR of ~72% and Profits reported a CAGR of 68.3% for the same period.
• JNK India Ltd. with its 27% market share in the Indian heating equipments market.
• JNK has recently diversified into waste gas handling systems, which include flares and incinerator systems. This line of business has shown good growth.
• Company intends to leverage the technical know-how of JNK Heaters to capitalize on future growth opportunities in renewable energy systems in India.
• JNK India IPO is coming at a PE of 42.6x (Fy23 earnings) and 37.7 x ( FY24 annualized earnings).
• I am likely to apply for JNK India IPO. JNK has the global parentage and both its existing business and new business are expected to do well.
• GMP as reported on social media has been Rs. 25-30.
• Please take a decision based on your risk appetite.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.