KRN Heat Exchanger shares likely to list at over 100% premium; check GMP ahead of tomorrow's listing

KRN Heat Exchanger and Refrigeration Ltd garnered 213.26 times subscription on the closing day of bidding.

KRN Heat Exchanger and Refrigeration Ltd shares will list on the exchanges on October 3 after garnering 213.26 times subscription on the closing day of bidding on September 27.

KRN Heat Exchanger IPO got bids for 234 crore shares against 1.09 crore shares on offer. Earlier, it raised Rs 100 crore from anchor investors.

The Rs 342-crore initial share sale had a price range of Rs 209-220 per share. Funds to the tune of Rs 242.5 crore will be used for investment in wholly-owned subsidiary KRN HVAC Products for setting up a new manufacturing facility at Neemrana, Alwar, in Rajasthan and the remaining funds will be used for general corporate purposes.

"We believe that the company could be listing with significant premium if we go by subscription demand and grey market premiums," said Narendra Solanki, Head Fundamental Research - Investment Services, Anand Rathi Shares and Stock Brokers.

KRN Heat Exchanger and Refrigeration Limited (KRN) specializes in manufacturing fin and tube type heat exchangers for the heat ventilation air conditioning and refrigeration (HVAC&R) industry and their products are primarily made from non-ferrous metals such as copper and aluminium.

The company plans to expand its capacity multi-fold which will generate increased growth in revenues from existing as well as new products like bar and plate heat exchanger, oil cooling unit with blower and motor and roll bond evaporator with improved margins from the export markets.

Shivani Nyati, Head of Wealth, Swastika Investmart Ltd. added KRN Heat Exchangers, a leading player in the heat exchanger industry, is set for a strong stock market debut. The IPO's impressive subscription of 213.41 times and a substantial grey market premium (GMP) of Rs 250 (113.64 percent) highlight strong investor interest.

"While the IPO's valuation appears fair, the absence of listed peers makes a direct comparison challenging. However, KRN Heat Exchangers' strong fundamentals and market demand suggest a promising outlook for the listing," she noted.

Prashanth Tapse, Sr VP Research Analyst at Mehta Equities Ltd believes "considering bumper subscription demand and market sentiments, there is a high possibility and an indication of a blockbuster market debut, which can double allotted investors’ money on day one of listings."

The HVAC market in India is growing rapidly due to urbanization, rising incomes, government initiatives, and the demand for energy-efficient solutions.

Sagar Shetty, Research Analyst, StoxBox said "The issue is all set to get listed on the bourses on 3rd October 2024 with an expected listing gain of over 100 percent."

The company's entire manufacturing operations are carried out at its consolidated manufacturing facility comprising two industrial plots situated in the RIICO Industrial Area, Neemrana, Rajasthan.