KRN Heat Exchanger IPO opens today: Pros and cons

Published: 25th Sep 2024

By: Value Research

About the company

KRN Heat Exchanger manufactures finned tube heat exchangers to improve heat transfer efficiency in the heating, ventilation, air conditioning and refrigeration industry. Its product range includes condenser coils and evaporator units, among many others.

Total IPO size (Rs cr) 342   Offer for sale (Rs cr) -   Fresh issue (Rs cr) 342   Price band (Rs) 209 -   220   Subscription dates September   25-27, 2024   Purpose of issue To   fund a new manufacturing facility and general corporate purposes

IPO details

1367   Net worth (Rs cr) 474   Promoter holding (%) 70.8   Price/earnings ratio (P/E) 35   Price/book ratio (P/B) 2.9M-cap (Rs cr)

Post-IPO

2Y growth p.a. (%) FY24 FY23 FY22   Revenue 40.5 308 247 156   EBIT 94.5 54 46 14   PAT 92.1 39 32 11   Net worth 127.1 132 60 26   Total debt 104.4 92 37 22Key financials (Rs cr)

Financial history

3Y average FY24 FY23 FY22   ROE (%) 57.2 40.9 75.9 54.9   ROCE (%) 38.8 31.2 50.5 34.7   EBIT margin (%) 15 17.5 18.6 9   Debt-to-equity 0.7 0.7 0.6 0.9Ratios

Key ratios

The pros

The company serves prestigious air conditioner giants like Daikin, Schneider Electric, Blue Star, Voltas, and Carrier. It incorporated KRN HVAC Products to increase value-added offerings, and is planning to manufacture new heat exchangers for a wider range of applications.

The cons

The company's revenue is concentrated. It has no long-term agreements with clients. Also, rising receivables and inventory impact cash flow. For our in-depth risk report, click the link below:

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