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The initial public offering (IPO) of KRN Heat Exchanger and Refrigeration Ltd, a Rajasthan-based manufacturer of fin and tube-type heat exchangers for the HVAC and refrigeration industry, has witnessed strong investor interest, receiving a 57.66 times subscription by the second day of bidding. The IPO, valued at Rs 341.95 crore, opened for public subscription on September 25, 2023, and is scheduled to close on September 27, 2023. The price band for the IPO has been fixed at Rs 209 to Rs 220 per share.
The strong subscription reflects positive sentiment towards the company and its growth prospects. The non-institutional investor category witnessed the highest subscription at 134.54 times, followed by retail individual investors (RIIs) at 55.08 times. The qualified institutional buyers (QIB) category received a 3.16 times subscription. This high subscription rate indicates strong demand for the company's shares.
The grey market premium (GMP) for the KRN Heat Exchanger IPO stands at Rs 251, implying a potential 114.09% listing gain. This reflects the high expectations of investors regarding the future performance of the company. However, it's important to note that GMP is based on market sentiment and can fluctuate.
Analysts are positive about the IPO, citing the strong growth trajectory of the Indian HVAC market driven by urbanization, rising disposable incomes, and increasing demand for energy-efficient solutions. KRN Heat Exchanger's focus on deepening market penetration, expanding its customer network, and venturing into exports is expected to fuel its future growth. The company's plan to invest in a new manufacturing facility in Rajasthan further strengthens its position in the market.
SMIFS, a brokerage firm, recommends subscribing to the IPO, citing the attractive valuations considering the company's planned capital expenditure and growth prospects. Stoxbox, another brokerage firm, echoes this sentiment, highlighting the fair valuation based on price-to-earnings ratio and recommends subscribing to the issue. The company's plans to utilize the IPO proceeds for a new manufacturing facility and general corporate purposes are also seen as positive indicators for its future growth.
Overall, the KRN Heat Exchanger IPO has generated strong investor interest, indicating confidence in the company's future prospects. The IPO's success and the positive outlook for the HVAC market suggest that KRN Heat Exchanger is well-positioned for further expansion and growth in the coming years.
Source: KRN Heat Exchanger IPO Day 2: Check Subscription Status, GMP Today