KRN Heat Exchanger and Refrigeration's Rs 342-cr IPO to Open on September 25

About the Company

KRN Heat Exchanger and Refrigeration Private Limited was formed in 1990 by K. Ramchandra Raju. It is engaged in manufacturing different types of heat exchangers. It offers a wide range of products, including Shell and Tube Heat Exchangers, Plate Heat Exchangers, Air Cooled Heat Exchangers, Condensers, and Chillers. The company has a manufacturing facility in Hyderabad, Telangana, and has supplied its products to several industries, including dairy, pharmaceuticals, chemicals, food processing, and power generation.

IPO Details

The initial public offering (IPO) of KRN Heat Exchanger and Refrigeration will open on September 25 and close on September 27. The company plans to raise Rs 342 crore through the IPO by issuing fresh shares worth Rs 100 crore and an offer for sale (OFS) of 1.43 crore shares by existing shareholders. The price band for the IPO has been set at Rs 237-243 per share. The minimum lot size for the IPO is 60 shares, and investors can bid for a maximum of 13 lots.

Objective of the IPO

The company aims to use the proceeds from the IPO for several purposes, including expanding its manufacturing capacity, repaying debt, and general corporate purposes. The expansion of the manufacturing capacity will enable the company to meet the growing demand for its products and increase its market share. The repayment of debt will help the company improve its financial position and reduce its interest expenses. The general corporate purposes may include working capital needs, capital expenditures, and other strategic initiatives.

Financial Performance

KRN Heat Exchanger and Refrigeration has witnessed steady growth in its financial performance over the past few years. In FY22, the company reported a revenue of Rs 195.7 crore, up from Rs 161.6 crore in FY21. The net profit for FY22 stood at Rs 12.6 crore, an increase from Rs 7.6 crore in FY21. The company's EBITDA for FY22 was Rs 22.4 crore, compared to Rs 16.2 crore in FY21.

Strengths

• Established track record of over three decades in the heat exchanger industry.
• Wide range of heat exchanger products to cater to diverse customer needs.
• Strong customer base across various industries, including dairy, pharmaceuticals, and food processing.
• Experienced management team with a proven track record of growth and profitability.

Risks

• Intense competition in the heat exchanger industry from both domestic and international players.
• Dependence on a few key customers for a significant portion of revenue.
• Fluctuations in raw material prices and foreign exchange rates.
• Risks associated with the expansion of the manufacturing facility.

Conclusion

KRN Heat Exchanger and Refrigeration's IPO offers investors an opportunity to participate in the growth story of a leading heat exchanger manufacturer in India. The company has a strong track record, a wide range of products, and a diverse customer base. However, investors should also consider the risks involved before investing in the IPO.