The initial public offering (IPO) of KRN Heat Exchanger has captured the attention of investors and analysts alike as it opens for subscription. The company aims to raise INR 341.51 crore through this offering, and several brokerage houses have provided their recommendations based on their analyses of the company’s financial health and market potential. Here’s a summary of KRN Heat Exchanger IPO recommendations by major brokerage houses.
KRN Heat Exchanger IPO Recommendations
Swastika Investmart – Subscribe for listing gain & long term
Analysts at Swastika Investmart have recommended that investors with a view of listing gain & long term tolerance might consider applying for the KRN Heat Exchanger IPO. The company has demonstrated robust growth in revenue and other positive financial metrics, its valuation appears fully priced. Swastika Investmart cautioned, “Careful consideration of the company’s size and potential risks is essential before investing.”
BP Equities – Subscribe
BP Equities has assigned a “subscribe” rating to the KRN Heat Exchanger IPO. “The issue is valued at a P/E of 25.3x on the upper price band based on FY24 earnings, which is deemed to be fair. Therefore, we recommend a SUBSCRIBE rating for the issue,” noted the brokerage firm.
Canara Bank Securities – Subscribe
KRN Heat Exchanger IPO recommendations saw another positive view from Canara Bank Securities. Analyst Sankita V noted that the global heat exchanger industry is experiencing growth of approximately 6.2%, which positions KRN favorably within an expanding market landscape. “The company generates 86% of its revenue domestically, while 14% comes from exports. Notably, 70% of its revenue is driven by commercial applications, indicating a strong concentration in this market segment. We recommend to SUBSCRIBE this issue for long-term gains,” opined the analyst.
Nirmal Bang Securities – Subscribe
Nirmal Bang Securities has issued a clear “subscribe” recommendation for KRN Heat Exchanger IPO. In their analysis, KRN Heat Exchangers demonstrates strong growth potential with revenue growth of 25% in FY24. “The company has an impressive EBITDA margin of 19%. Despite high working capital days (88), KRN delivered healthy ROCE (31.2%) and ROE (29.7%), indicating strong profitability. Although there are no direct peers, upon comparing KRN with AC outsourcing and heat exchanger companies in the listed space, its lower valuations despite superior return ratios suggest the company is undervalued. Thus we recommend subscribing to the issue.”
Reliance Securities – Subscribe
Another positive word among KRN Heat Exchanger IPO recommendations came from brokerage firm Reliance Securities which suggested that investors with a medium risk appetite subscribe to the upcoming IPO as a long-term investment. Being a first-generation entrepreneur with over 19 years of experience in manufacturing heat exchangers and refrigeration units has moved KRN from a single product to a multi-product company with long-standing business relationships with leading clientele and a multi-fold expansion in revenues in the coming years offers strong growth going ahead with consistent profitability. Hence, we recommend a SUBSCRIBE to the issue.
SBI Securities – Subscribe for long-term
Analysts at SBI Securities noted that at the upper price band of Rs 220, the company is valued at an FY24 P/E multiple of 35.0x based on its post-issue capital. The issue appears attractive given the healthy growth track record of the company. “KRN’s Revenue/EBITDA/PAT has grown at a CAGR of 40.5%/86.1%/92.1% respectively over FY22-24. The IPO proceeds will be utilized by the company to fund for establishment of a new manufacturing unit in Rajasthan which will help expand its product portfolio and distribution channel. We recommend subscribing to the issue for a long-term investment horizon,” noted the research report.
KRN Heat Exchanger IPO Recommendations – Bottomline
In conclusion, brokerage houses are generally optimistic about the KRN Heat Exchanger IPO, recommending subscriptions based on varying risk appetites and investment horizons. While some firms advocate for long-term investments due to growth potential, others emphasize caution due to market volatility and company size considerations.
In addition, there is a strong premium in the informal or grey market, reflecting listing with potential gains of 109%. Nevertheless, investors are encouraged to assess their individual risk profiles and conduct thorough research before participating in this IPO.
