KRN Heat Exchanger IPO: Should You Invest? Key Details, GMP, and Expert Opinions Revealed

KRN Heat Exchanger, a manufacturer of heat exchanger tubes, has launched its IPO on September 25, aiming to raise around ₹342 crore. Before the IPO, the company already secured ₹100.10 crore from 10 anchor investors. The IPO is entirely a fresh issue of 1.55 crore shares, with no offer for sale (OFS) involved. The subscription period ends on Friday, September 27.

Key Details About KRN Heat Exchanger IPO:

1. IPO GMP (Grey Market Premium):
   KRN Heat Exchanger shares are trading at a premium of ₹239 in the grey market. Based on this, the shares are expected to list at ₹459, a 108.64% premium over the issue price of ₹220 per share.
2. Price Band:
   The IPO price band is set between ₹209 and ₹220 per share.
3. IPO Dates:
   The subscription started on September 25 and ends on September 27.
4. IPO Size:
   The company is offering 1.55 crore shares, aiming to raise nearly ₹342 crore.
5. Lot Size:
   The minimum lot size is 65 shares. Retail investors need to invest a minimum of ₹14,300 for one lot, with a maximum of 13 lots allowed.
6. Allotment Date:
   The allotment of shares is expected to be finalized on Monday, September 30. Shares will be credited to successful applicants’ demat accounts by October 1, with refunds for unsuccessful applications on the same day.
7. IPO Registrar:
   Bigshare Services Private Limited is the official registrar for the IPO.
8. Listing Date:
   Shares are expected to be listed on the NSE and BSE on October 3.
9. Use of Proceeds:
   The funds raised will be used to invest in the company’s subsidiary, KRN HVAC Products, to build a new manufacturing plant in Neemrana, Rajasthan. A portion of the funds will also go towards general corporate needs.
10. Company Overview:
    KRN Heat Exchanger manufactures components for the HVAC and refrigeration industries, such as evaporator units and coils. Their profits have grown significantly from ₹11 crore in FY22 to ₹39 crore in FY24.

Should You Apply?

Experts are generally positive about the IPO, citing the company’s strong market position and fair valuation. The growing demand for HVAC products in India, driven by urbanization and rising disposable incomes, is expected to benefit KRN Heat Exchanger.

Sagar Shetty, a research analyst at StoxBox, recommends subscribing to the IPO, noting that the company’s price-to-earnings ratio of 25.3x is reasonable. The company’s strategy to diversify its customer base and expand its product range is seen as a positive sign for future growth.

However, Arun Kejriwal, founder of Kejriwal Research and Investment Services, suggests that only investors with a high-risk appetite should consider this IPO for potential listing gains, as KRN is a vendor to other companies and doesn’t develop end-user products directly.

In summary, KRN Heat Exchanger’s IPO shows strong growth potential, but investors should weigh the risks before applying.