KRN Heat Exchanger IPO: GMP falls after allotment; is it still a multibagger in making?

KRN Heat Exchanger and Refrigeration has finalized the basis of the allotment of its shares, which has already been made public. However, the grey market premium (GMP) of the issue has seen a decent correction, which has reduced the listing expectations for the investors who have got the allotment of shares in the IPO. The stock shall be listed on Thursday, October 3.

Last heard, the company was commanding a GMP of Rs 240 per share in the unofficial market, suggesting a listing pop of little more than 110 per cent for the investors. However, the premium in the unofficial market stood at Rs 270 apiece, indicating gains of around 125 per cent over the issue price, before the allotment status was out.

KRN Heat Exchanger and Refrigeration (KHERL) was able to garner stellar demand from the market and the stock is expected to see listing gains of over 100 per cent after attracting a solid response from the investors during the bidding process, said Sagar Shetty, Research Analyst at StoxBox.

"KHERL is well-positioned to capitalize on these trends and strengthen its market position. We thus advise participants who have been allotted with the issue to book profit from the listing gains. We will reassess our recommendation if the company's financial situation shows signs of improvement in the future," he added.

Rajasthan-based KRN Heat Exchanger sold its IPO in the price band of Rs 209-220 per share with a lot size of 65 shares, which was open for bidding between September 25 and September 27. The company aimed to raise around Rs 341.95 crore from its primary offering, which was entirely a fresh share sale of 1,55,43,000 equity shares.

The issue was overall subscribed an astounding 214.42 times, thanks to all round demand. The portion for qualified institutional bidders (QIBs) was booked a solid 253.04 times, while the quota for non-institutional investors (NIIs) was subscribed 431.63 times. The allocation of retail investors was subscribed 98.29 times during the bidding process.

KRN Heat Exchangers is a leading player in the industry, which is set for a strong stock market debut. The IPO saw impressive subscription of, highlighting strong investor interest, said Shivani Nyati, Head of Wealth, Swastika Investmart. "The IPO's valuation was fair. Its strong fundamentals and market demand suggest a promising outlook for the listing," she said.

KRN Heat Exchanger and Refrigeration is a manufacturer of fin and tube-type heat exchangers, offering copper and aluminium fins and copper tubes, heat exchangers, water coils, condenser coils, and evaporator coils. All the products offered are used in the domestic, commercial, and industrial heating, ventilation, air conditioning and refrigeration industry.

Brokerage firms were mostly positive on the issue suggesting to subscribe to it. Holani Consultants is the sole book running lead manager of the KRN Heat Exchanger IPO, while Bigshare Services is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE.