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JNK India IPO booked nearly 30 times on Day 3 so far; retail portion subscribed 3.41 times
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
The category reserved for retail was booked 3.60 times, non institutional investors (NII) at 23.08 times, while that of qualified institutional buyers (QIBs) investors was booked 75.72 times so far.
The initial public offering (IPO) of JNK India saw a strong response from the investors during the third and final day of the bidding process. Bidding for the issue was mostly led by institutional bidders. The issue was overall subscribed 27.83 times on the final day of the bidding.
According to the data, the Investors made bids for 30.84 crore equity shares, compared to the 1.10 crore equity shares offered for the subscription by 4.24 pm on Thursday, April 25. Bidding for the issue, which opened on April 23, concludes today.
The category reserved for retail was booked 3.60 times, non institutional investors (NII) at 23.08 times, while that of qualified institutional buyers (QIBs) investors was booked 75.72 times.
In the unlisted market, shares of the company are commanding a premium of ₹15 today.
However, it is important to note that grey market premiums are just an indicator of how the company’s shares are stacked up in the unlisted market and are subject to change rapidly.
Analysts mostly have assigned a ‘Subscribe’ rating to the IPO, given the company’s robust order book, global parentage, skilled and experienced promoter.
“JNK India has demonstrated financial performance with a robust order book reflecting revenue visibility for last three fiscals. At the upper price band, the company is valuing at P/E (price-earnings) of 49.38 times, EV/EBITDA 33.13 times with a market cap of ₹2,308 crore post issue of equity shares and return on net worth of 47.71%,” Anand Rathi Research said.
The company has fixed a price band of ₹395-415 per share for its ₹650-crore IPO.
The issue included fresh shares worth ₹300 crore and an offer-for-sale (OFS) of up to 84.2 lakh shares by its existing shareholders and promoters.
The OFS consists of up to 11.2 lakh shares by Goutam Rampelli, up to 24.3 lakh by JNK Global, up to 44 lakh by Mascot Capital and Marketing and up to 46.8 lakh shares by Milind Joshi.
Considering the upper end of the price band, the IPO size will be ₹650 crore and the post-issue market capitalisation is expected to be around ₹2,300 crore.
As much as 50% of the offer is reserved for qualified institutional buyers, 35% for retail investors, and the rest 15% for non-institutional investors.
The net proceeds from the IPO will be utilised for funding the working capital requirements and general corporate purposes.
Business overview
JNK India manufactures heating equipment for process industries such as oil refineries and petrochemical plants. The company handles everything from design to installation, serving both the domestic and international markets.
It is one of the well-recognised heater companies in India, having a market share of approximately 27% in the segment, in terms of new order booking in financial year 2023.
Its biggest rival in India is Thermax Ltd. It has also expanded into flares, incinerator systems, and is planning to venture into the renewable sector with green hydrogen.
Financials
For FY23, JNK India posted a revenue of ₹407 crore, compared to ₹296.40 crore a year ago. The company’s net profit for the fiscal came in at ₹46 crore as against ₹36 crore last year. As of the nine months ended 2023, the total debt of the company came in at ₹56.73 crore.
As of December last year, the company’s order book totalled ₹845.03 crore, with 86% from India and 13.71% from overseas.
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