KNR Heat Exchangers is a Alwar (Rajasthan) based manufacturer of copper and aluminum heat exchangers, used by the heating, ventilation, air conditioning, and refrigeration (HVAC&R) industry. KRN Heat Exchanger IPO aims to raise Rs 341.95 crores. The issue is entirely a fresh issue of 1.55 crore shares.
| IPO opens | September 25, 2024 |
| IPO Closes | September 27, 2024 |
| IPO Size (Rs.) | ₹341.95 Cr |
| Breakup | Fresh issue only |
| Face Value: | ₹ 10 |
| IPO Price in Rs : | ₹209 to ₹220 per share |
| Minimum Lot | 65 Shares |
| Listing At | NSE , BSE (mainboard) |
| QIB | ~50 % |
| NII Quota | ~15% |
| Retail Quota | ~35% |
| BRLM | Motilal Oswal Investment Advisors, Nuvama Wealth Management, BOB Capital Markets |
| Registrar | Bigshare |
KRN Heat Exchanger:
- KRN Heat Exchanger and Refrigeration Ltd was incorporated on 2017.
- They are the in the business of manufacturing aluminium and copper fin, copper tube condenser and evaporator coils used by OEMs in heating, ventilation, air conditioning, and refrigeration (“HVAC&R”) industry.
- Their coils are used in heating equipment, ventilation equipment, and cooling or air-conditioning equipment used in domestic, commercial, and industrial HVAC systems to control the temperature, humidity, and purity of the air.
- Company’s product portfolio includes evaporator coils, condenser coils, fluid and steam coils, condensing units, copper headers parts, sheet metal parts.
- Their manufacturing facility comprises industrial plots situated in the RIICO Industrial Area, Neemrana, Rajasthan.
- In Financial Year ended on March 31, 2024, they had a customer base of over 115 customers, diversified across geographies.
Financials : KRN Heat Exchanger IPO
| Particulars / Rs. Cr | 2024 | 2023 | 2022 |
| Revenue from Operations | 6,110.95 | 4,507.52 | 2,555.63 |
| Revenue Growth (%) | 35.57 | 76.38 | – |
| EBITDA | 277.43 | 174.52 | 141.98 |
| EBITDA Margin (%) | 4.54 | 3.87 | 5.56 |
| Net Profit | 154.34 | 93.7 | 69.52 |
| Net Profit (%) | 2.53 | 2.08 | 2.72 |
| ROE (%) | 28.88 | 25.09 | 22.48 |
| ROCE (%) | 27.31 | 23.29 | 19.89 |
| Share Capital | 118 | 118 | 118 |
| Net Worth as stated | 534.38 | 365.73 | 282.01 |
| Total Borrowings | 396.5 | 283.21 | 294.95 |
| Post issue Share Capital | 135.7 | ||
| FV | 10.0 | ||
| IPO price | 480.0 | ||
| EPS Fy234 | 11.4 | ||
| PE | 42.2 | ||
| Market cap in Lacs | 6,514 | ||
| Market cap / Sales | 1.07 |
Anchor: KRN Heat Exchanger IPO
Salient Points: KRN Heat Exchanger IPO
- Heat exchangers manufactured by them are made of non-ferrous metals primarily Copper and Aluminum.
- They are specialist in Fin & Tube Type Heat Exchanger
- To expand the business of their company and to reap the benefits of forward integration, KRN has incorporated a wholly owned subsidiary company, namely KRN HVAC Products Pvt Ltd to increase value-added products in their existing portfolio.
- The expansion planned is sizeable.
- KRN HVAC Products Pvt Ltd will focus on manufacturing certain types of heat exchangers that are currently not manufactured by the company.
- New capacity will cater to export and bar and plate heat exchanger will cater to railways.
- Volumes:
| Particulars | For the Financial Year ended on | ||
| March 31, 2024 | March 31, 2023 | March 31, 2022 | |
| Total Quantity Sold (in Units) | |||
| Evaporator Coils | 2,02,273 | 1,13,182 | 1,07,564 |
| Condenser Coils | 2,45,950 | 2,74,890 | 2,25,063 |
| Headers/ Copper Parts | 1,29,580 | 96,630 | 14,977 |
| Sheet Metal Parts | 1,141 | 7,138 | 652 |
| Total Quantity Produced (In units) | |||
| Evaporator Coils | 2,20,152 | 1,13,027 | 1,07,356 |
| Condenser Coils | 2,56,264 | 3,05,944 | 2,26,300 |
| Headers/ Copper Parts | 6,06,854 | 4,85,552 | 3,60,118 |
- Clients:
- Significant revenue dependence on Daikin Airconditioning.
- Plans to Export a minimum of 33% of the production worldwide. currently 19%.
- Capacity utilization ~ 84% in FY24.
- Company’s operations are B2B
- In the last pre-IPO round, they raised Rs. 9.5 cr at Rs. 200 per share in Aug 2024.
- P/E ratio stands at ~ 33.5x.
- Listed Peers: None
- Revenue from operations from last three Financial Years are increasing by Compounded Annual Growth Rate (CAGR) of 25.46%.
- I intend to apply in KRN Heat Exchanger IPO. Exports potential is large TO USA and green field expansion will lead to considerable increase in capacity. Overall looks reasonably priced with excellent prospects.
- GMP as reported on social media has been Rs. 239 (108%).
- This post is exploratory and educational purposes only.
- 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.