KRN Heat Exchanger and Refrigeration IPO

KRN Heat Exchanger and Refrigeration Limited is a prominent manufacturer of fin and tube-type heat exchangers for the HVAC&R industry. The company’s product lineup includes condenser coils, evaporator units, and various other components made primarily from copper and aluminium, tailored to client specifications with tube diameters ranging from 5MM to 15.88 MM.

KRN’s products are utilised in a wide range of applications including residential and commercial air conditioning, refrigeration for food and beverages, and specialised cooling systems for data centres and medical equipment. To ensure longevity and efficiency, the company applies advanced protective coatings like nano and powder coatings to critical parts.

Manufacturing is conducted at KRN’s extensive facilities located in the RIICO Industrial Area, Neemrana, Rajasthan. These plants are equipped with state-of-the-art technology to maintain high standards of quality and productivity. KRN holds several key certifications such as ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, and others, reflecting its commitment to quality and environmental management.

KRN Heat Exchanger and Refrigeration IPO Strengths

• KRN Heat Exchanger and Refrigeration Limited exhibits robust financial performance, with a substantial revenue increase to ₹16,064.24 lakh in 2023, demonstrating a CAGR growth of 48.34% over the past three years, indicating strong market demand and effective business strategies.
• The company has established an extensive manufacturing capability at its RIICO industrial area facility in Neemrana, fully equipped for end-to-end production, which enables control over quality and cost advantages over competitors who outsource production stages.
• KRN maintains a comprehensive in-house quality management system with 41 dedicated employees, ensuring product excellence through multi-level checks such as Helium and Water Leak Tests, contributing to a consistent reputation for quality and reliability in the market.

KRN Heat Exchanger and Refrigeration IPO Risks

• KRN Heat Exchanger and Refrigeration Limited plans to invest ₹22,688.54 lakhs in a new manufacturing facility. However, delays or cost overruns in machinery acquisition and construction could significantly exceed the budgeted ₹24,410.98 lakhs, impacting financial stability.
• The company derives substantial revenue from a few key customers, with 75.94% from the top 10 in 2023. Any loss or reduction in orders from these customers could materially harm business and financial outcomes.
• 80.58% of the company’s raw materials were imported as of September 2023. Any new import restrictions or tariffs could escalate costs and disrupt supply chains, adversely affecting operations and profitability.