JNK India Listing: Stock expected to list at 20-25% premium to IPO price on April 30

JNK India IPO: Ahead of the listing, the shares were commanding a 31 percent premium in the grey market.

JNK India stock is expected to make a decent debut on bourses on April 30. Analysts expect the shares to list at a 20-25 percent premium over the IPO price, somewhere between Rs 500 and Rs 520.

Ahead of the listing, the shares were commanding a 31 percent premium in the grey market, an unofficial ecosystem where shares start trading before the allotment in the IPO and continue till the listing day. Most investors track the grey market premium (GMP) to get an idea of the listing price.

Also Read: JNK India IPO: 10 things to know about the Rs 649-crore issue

“Given the positive secondary market environment and healthy subscription demand on the last day of the issue gives good room for healthy listing around 22-25 percent premium against the issue price,” said Prashanth Tapse, Research Analyst & Sr VP Research at Mehta Equities Ltd.

Tapse believes the listing is justified due to the company’s niche market leadership in heating equipment completing the value chain in heaters, reformers and cracking Furnace along with a strong track record of over a decade.

JNK India's IPO worth Rs 649.47 crore saw a subscription of 28.13 times on the final day of bidding. Qualified institutional buyers bought 75.72 times their quota. Non-institutional investors were next in line, buying 23.26 times the allotted quota followed by retail investors who purchased 4.11 times the reserved portion.

The price band for the IPO, which was a fresh issue of over Rs 300 crore and an offer for sale of shares worth Rs 349.47 crore, was fixed at Rs 395-415 apiece.

“The stock is expected to list at a premium of around 20 percent to the issue price. We believe that the listing gains can be attributed to JNK India’s position at the forefront of the heating equipment sector, poised to leverage the growing demand within the oil and gas industry,” said D. K. Mudaraddi, Research Analyst, StoxBox.

Also Read: JNK India IPO: Brokerage Calls

In FY23, the company’s revenue came in at Rs 407.32 crore, up from Rs 296.40 crore in the previous year. The oil and gas segment emerged as the primary contributor, accounting for 77 percent of the revenue. Its net profit rose to Rs 46.36 crore from Rs 35.98 crore in the preceding year. As of the nine months ending in 2023, the company's debt stood at Rs 56.73 crore.

“The company has carved out a niche in the heating equipment segment and has consistently demonstrated growth in both its top and bottom lines for the reported periods. However, judging by the annualized earnings for FY24, it appears to be fully priced,” said Amit Goel, Co-Founder and Chief Global Strategist at Pace 360.

JNK India specialises in the design, manufacturing, supply, installation, and commissioning of process-fired heaters, reformers, and cracking furnaces. The company has successfully executed projects across various states in India, including Andhra Pradesh, Assam, Bihar, Karnataka, Kerala, Maharashtra, Tamil Nadu, and West Bengal.

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