KRN Heat Exchanger and Refrigeration Limited IPO

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The company specializes in the manufacturing of fin and tube type heat exchangers designed specifically for the Heat Ventilation Air Conditioning and Refrigeration (HVAC&R) industry. Their heat exchangers, crafted from non-ferrous metals such as Copper and Aluminum, are integral components in various systems, providing efficient heat transfer solutions for a broad array of applications.

Product Range

They produce a wide variety of heat exchangers to meet the diverse needs of their customers, including:
i. Condenser coils – Used to release heat from refrigerant in cooling systems.
ii. Evaporator units and coils – Essential for absorbing heat and enabling the cooling cycle.
iii. Header and copper parts – Components that facilitate fluid and refrigerant flow within heat exchangers.
iv. Fluid and steam coils – Designed for use in systems requiring the transfer of fluids or steam for heating or cooling processes.
v. Sheet metal parts – Supporting components for various industrial applications.

Their product line is tailored for applications in air conditioning, heating, ventilation, refrigeration, and process cooling systems. This versatility allows them to serve a broad market, including commercial, industrial, and residential HVAC&R systems.

Market Position and Focus

By leveraging their expertise in non-ferrous metals and advanced manufacturing techniques, they have positioned themselves as a key supplier in the HVAC&R market. Their focus on quality, customization, and efficiency allows them to meet the evolving needs of this industry while maintaining strong relationships with their customers.

They are committed to continuous innovation and expanding their product offerings, ensuring that they remain at the forefront of the heat exchanger manufacturing industry. Through their technical proficiency and customer-centric approach, they aim to be the preferred partner for businesses seeking reliable and high-performance heat exchange solutions.

Objects of the KRN Heat Exchanger and Refrigeration Limited IPO:

The net proceed from fresh issue is to be utilized for the following; i. Invest in the wholly owned subsidiary, KRN HVAC Products Pvt Ltd for setting up a new manufacturing facility at Neemrana, Alwar, Rajasthan, and ii. General corporate purposes.

KRN Heat Exchanger and Refrigeration Limited IPO Details:

Open Date: Sep 25 2024
Close Date: Sep 27 2024
Total Shares: 15,543,000
Face Value: ₹ 10 Per Equity Share
Issue Size: 341.95 Cr.
Lot Size: 65 Shares
Issue Price: ₹ 209 - 220 Per Equity Share
Listing At: NSE,BSE
Listing Date: Oct 03 2024

Promoters And Management:

Santosh Kumar Yadav, the Promoter, Chairman, and Managing Director, holds a diploma in Business Management from IMT Ghaziabad and a Mechanical Engineering diploma from Rajasthan's Board of Technical Education. With over 19 years of experience in heat exchanger and refrigeration manufacturing, including leading operations at LLOYD Electric, he guides the company's strategic planning and brand growth. Anju Devi, the Promoter and Whole-Time Director, completed her secondary education with the Rajasthan Board in 2001. She served as a resident consultant at Lloyd Electric and Engineering Limited from 2012 to 2014. Joining the company in 2017, she has overseen the Human Resource Management department for the past six years. Manohar Lal, the Promoter and Non-Executive Director, completed his secondary education in 1995 with the Rajasthan Board. After serving over 21 years in the Indian Army, he brings strong leadership and motivation skills with a forward-thinking approach. He joined the company as a Non-Executive Director in 2023.

Financials of KRN Heat Exchanger and Refrigeration Limited IPO:

Particulars

FY 2023-24 (Consolidated) FY 2022-23 (Standalone) FY 2021-22 (Standalone)

Revenue

308.28 247.48

156.11

EBITDA

63.70 51.71

19.03

EBITDA Margins 20.66% 20.89% 12.19%

PAT

39.06 32.31

10.59

PAT Margins 12.67% 13.05%

6.78%

 

Comparison With Peers:

There are no listed companies in India that engage in a business similar to that of the Company. Accordingly, it is not possible to provide an industry comparison in relation to the Company.

Recommendation on KRN Heat Exchanger and Refrigeration Limited IPO:

Review and Recommendation of KRN by IZ team is 5/10 1. KRN Heat Exchanger and Refrigeration Limited is in the business of manufacturing heat exchangers, primarily for the HVAC&R (Heating, Ventilation, Air Conditioning, and Refrigeration) industry. They produce various types of heat exchangers using copper and aluminium, catering to both domestic and international markets. 2. The company has experienced consistent growth in revenue and profitability in recent years.3 Revenue from Operations has grown at a CAGR of 25.46% from FY22 to FY24.3 Similarly, Profit after Tax has seen a CAGR of 54.52% during the same period. 3. KRN Heat Exchanger has a diversified customer base, serving 112 customers in FY23.3 However, there is a concentration risk as their top 10 customers account for a significant portion of their revenue (75.94% in FY23). 4. The company emphasises quality control and has a dedicated quality management team.They have internal quality checks at various production stages and possess relevant industry certifications. 5. KRN Heat Exchanger plans to use the IPO proceeds for several purposes, including investing in a wholly owned subsidiary (KRN HVAC Products Private Limited) to expand their product portfolio and for general corporate purposes. 6. At the upper price band, the price-to-earnings (PE) ratio stands at 34.9 times the FY24 earnings per share (EPS), with a price-to-book value (P/BV) ratio of 2.9 times and an enterprise value to sales (EV/Sales) multiple of 4.6 times. Looks at reasonable valuation.

Lead Manager of KRN Heat Exchanger and Refrigeration Limited IPO:

  1. Holani Consultants Private Limited

Registrar of KRN Heat Exchanger and Refrigeration Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

KRN Heat Exchanger and Refrigeration Limited Plot No. F - 46, 47, 48, 49 EPIP, RIICO Industrial Area, Neemrana, Alwar Phone: +91 – 9257025440 Email: cs@krnheatexchanger.com Website: http://www.krnheatexchanger.com/

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