JNK India IPO has opened today for subscription and analysts are out with their coverage reports on the heating equipment company. The upcoming IPO comprises both fresh issue and OFS. Priced at INR 395 – 415 per share, it aims to mobilize INR 649.47 crores, the IPO will remain active through 25 April 2024. JNK India IPO ratings are mostly positive. Analysts have highlighted multiple positive factors including strong operating performance, better cost-efficiencies, and a deep understanding of specializes in thermal designing, engineering, manufacturing, supplying, installing, and commissioning process-fired heaters, reformers, and cracking furnaces.
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JNK India IPO Ratings: Here is Why Analysts Are Positive Ratings
Analysts at Arihant Capital Markets have a positive view of the prospects of the JNK India IPO. “JNK India has a strong position in the heating equipment market, with a focus on diverse offerings and the order book stood at INR 8,450mn as of Q3FY24 showing potential revenue visibility. The company’s growth potential is underscored by increasing demand from India’s refinery, petrochemical, and fertilizer sectors, as well as its expansion into global markets. High entry barriers and a strategic emphasis on capitalizing on global refinery expansions further solidify its investment appeal. With a track record of impressive revenue growth and clear revenue visibility, JNK India presents a compelling opportunity for investors seeking exposure to the heating equipment sector. At the upper band of INR 415, the issue is valued at an EV/EBITDA of 33.5x based on FY23 EBITDA of INR 693 Mn and P/E of 43.6x based on FY23 EPS of INR 9.5. We are recommending “Subscribe for Long Term” for this issue.”
Choice Broking expressed similar positivity in its research note “We believe there is no peer having product-line similar to the JNK. The above peers considered are having diversified operations. At higher price band, JNK is demanding an P/E multiple of 49.8x, which is at a significant discount to the peer average. Thus, considering the niche product profile and medium-term growth prospects, we are assigning a “SUBSCRIBE” rating for the issue.”
BP Wealth has also sounded a positive note on the prospects of JNK India IPO. “In terms of valuation, despite demanding a P/E multiple of 49.8x at the higher price band, JNK India presents an attractive proposition, given the company’s unique product profile and promising growth prospects. Considering the financial metrics, market dynamics, and valuation multiples, we maintain a positive outlook on JNK India Ltd. Therefore, we recommend a “SUBSCRIBE” rating for the issue from a medium to long-term perspective.”
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Marwadi Financial Services expressed similar positivity in its research note. “We assign a “Subscribe” rating to this IPO as the company has an established track record with a diverse customer base along with diversifying product portfolio to cater to varied industries. Also, it is available at a reasonable valuation as compared to its peers.”
Nirmal Bang is another brokerage house with positive JNK India IPO recommendations. “JNK is well placed to capitalize on the Global as well as Indian capex unfolding in the oil and gas, petrochemicals and fertilizer industries. With the heating equipment industry having limited players due to high entry barriers, JNK has been able to command strong EBITDA margins of 17% and generate ROCE of 40% in FY23. JNK has delivered growth and return ratios which are superior to comparable companies while its valuation is at the lower end of the range. Based on favourable industry structure with limited competition and strong pipeline of orders, we are positive on JNK and recommend to Subscribe to the IPO.”
Analyst view at Elite Wealth is also positive as its report reads, “The PE of JIL stands at 49.8x on the upper price band which seems reasonable when compared to its peer’s average of 149x. Hence, we recommend investors to apply to the offering for the long term perspective.”
Reliance Securities added another positive word to JNK India IPO recommendations. “We expect the order book is expected to see improvement with new businesses and improved prospects for the oil-gas and fertilizer sectors. JNK has a global parentage, and skilled and experienced promoters holding respective backgrounds in their line of business are the added advantages. Hence, we recommend a “SUBSCRIBE” to the issue.”
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JNK India IPO Recommendation: Not Everybody Is Impressed
SMC Global offered 2 stars to the public offer while stating the following risk factors:
- The Company derived the majority of its revenues from its Corporate Promoter, JNK Global, and used its experience and technology support for select projects. Dissociation with JNK Global may hurt its business
- Increase in commodity prices
- Dependency on third for most of its projects with regards to the fabrication process
- High working capital requirement and may require alternate funding in FY-2024 and FY-202
Jainam Broking is also not positive and has advised clients to Avoid investing in the IPO.
Nevertheless, it is quite clear that most brokerage houses have sounded positive notes in JNK India IPO Ratings. According to the data collected by IPO Central from the grey market, the offer is not only actively traded but is also commanding a healthy premium indicating a positive listing.
