KRN Heat Exchange share price rises further after stellar listing with 113-118% premium : Buy, Sell or Hold the stock?

KRN Heat Exchanger and Refrigeration Ltd share price that listed with stellar 113% premium on the BSE at ₹470 and 118% premium on the NSE at ₹480 gained further. KRN Heat Exchanger and Refrigeration share price scaled highs of ₹497.89 on the NSE and ₹497.00 on the BSE.

Analysts already had remained positive n the prospects of the company and the strong subscriptions received by the KRN Heat Exchanger and Refrigeration IPO had shown strong investor interest while GMP or Grey Market premium indicated towards strong gains

Analyst Views

Analysts at Anand Rathi had given “SUBCRIBE for LONG TERM” rating on the IPO. Given the company’s established history, its intention to grow globally, and the growing demand in the HVAC industry, KRN’s revenue and profit margin may eventually benefit. Thus, Anand Rathi analysts believe that this issue may be considered for its long term growth.

However in the near term, the valuations were capturing near term propsects. Anand Rathi said that at the upper price band the company’s implied market cap is around ₹1310 Crore valuing at Price to earnings ratio of 33.5 times for FY24 which appears to be fully priced.

On valuation front, post listing stock may be richly valued and short term investors could book some profits, said Narendra Solanki, Head Fundamental Research – Investment Services, Anand Rathi Shares and Stock Brokers.

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd said that Despite markets selloff, KRN Heat Exchanger listing was in line with our expectations which was on the back of bumper subscription response from all sets of investors. For allotted investors, Ta[se said had recommended to book profits as we believe post listing the valuations can over stretch on a higher side discounting all the medium term business growth visibility. For non-allottees it would be better to wait and watch for the price to settle.

Shivani Nyati, Head of Wealth, Swastika Investmart Ltd had similar recommendations and said that even though the IPO’s valuation seems reasonable, it is difficult to draw direct comparisons because no peers have been listed. Nonetheless, investors may book a portion of the profit and keep the remaining amount because of KRN Heat Exchangers’ excellent fundamentals and market demand.

Key growth drivers –

Among the key strength highlighted by KRChoksey Research included

Long‐standing business relationships with leading clientele

Effective quality control checks

Business Association with Customers as Daikin Airconditioning India Private Limited, Schnieder Electric IT Business India Private Limited , Kirloskar Chillers Private Limited , Blue Star Limited , Climaventa Climate Technologies Private Limited among others

Established Manufacturing facility

and consistent Financial Performance

About KRN Heat Exchanger Market Presence and Global Footprint-

The business is well-known both domestically and abroad. For FY24, Products from KRN Heat Exchanger were exported to 14 countries and marketed in several Indian states. North America and Europe have become important global markets and there is a growing demand for the company’s products.

Meanwhile market participants expectations remained strong as was indicated by strung subscription and GMP and rising prices

The IPO for KRN Heat Exchanger received 213.41 subscriptions. In the retail category, the public issue had received bids 96.74 times; in the QIB category, 253.04 times; and in the NII category, 430.54 times.

The GMP also suggested that market players anticipated KRN Heat Exchanger and Refrigeration shares to list with large gains.

The IPO GMP for KRN Heat Exchanger was ₹230, albeit it was less than ₹270 at the beginning of the subscription period. On day two, the GMP was ₹235, based on information from Investorg ain.com. For KRN Heat Exchanger shares, the current GMP continues to show significant listing gains

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.