KRN Heat Exchanger IPO: Shares Expected to Surge Over 100% Premium on Listing Day

KRN Heat Exchanger and Refrigeration Ltd, a prominent player in the HVAC industry, is ready to make its mark on the stock exchanges with its shares scheduled to be listed on October 3. The company recently concluded its IPO, which garnered an overwhelming subscription of 213.26 times on its closing day, September 27. This high demand, coupled with a significant grey market premium (GMP) of ₹250, indicates the potential for a remarkable listing performance.

The HVAC market in India has been expanding at a rapid pace, driven by urbanization, rising household incomes, and government-led initiatives promoting energy-efficient solutions. Companies like KRN Heat Exchanger, which provide essential components like heat exchangers made from copper and aluminum, are poised to benefit from these favorable market conditions. The company’s products cater to the heating, ventilation, air conditioning, and refrigeration (HVAC&R) sector, addressing both domestic and international demand.

KRN Heat Exchanger’s IPO offered shares in the price band of ₹209-220, with the total IPO size amounting to ₹342 crore. From the proceeds, ₹242.5 crore is earmarked for enhancing its manufacturing capabilities at its Neemrana, Rajasthan facility, while the remaining amount will be allocated for general corporate purposes. This expansion plan is expected to drive future growth as the company scales up its operations to meet rising demand.

According to market experts, the strong subscription numbers and high grey market premiums point towards a listing at a premium of over 100%. Narendra Solanki, Head of Fundamental Research at Anand Rathi Shares and Stock Brokers, expressed confidence in the stock’s performance, citing the high subscription demand and robust market sentiment as key factors driving this optimism.

Shivani Nyati, Head of Wealth at Swastika Investmart Ltd, also weighed in on the IPO's outlook, highlighting the company's dominant position in the heat exchanger market. She noted that KRN's strong fundamentals and impressive subscription figures make the stock an attractive investment, particularly given the lack of direct listed competitors in the industry.

As the company gears up for its stock market debut, its expansion strategy focuses on enhancing production capacity for products like oil coolers, plate heat exchangers, and roll bond evaporators. These products are used extensively across various industrial applications, and with rising exports, KRN aims to capture more international market share.

Prashanth Tapse, Senior VP Research Analyst at Mehta Equities Ltd, shared similar sentiments, stating that the strong demand and favourable market conditions point to a potential doubling of investor returns on listing day. He noted that KRN Heat Exchanger’s successful IPO signals a promising start, with the company positioned to leverage its market-leading products and expertise.

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With the HVAC industry witnessing accelerated growth due to increasing demand for energy-efficient solutions, KRN Heat Exchanger is well-placed to capitalize on these trends. As the company continues to innovate and expand its manufacturing footprint, analysts believe that it will play a significant role in shaping the future of the industry.