KRN Heat Exchanger Vs Diffusion Engineers IPO: Which to Choose?

KRN Heat Exchanger Vs Diffusion Engineers IPO

Two intriguing IPOs are currently open for subscription—KRN Heat Exchanger and Diffusion Engineers. Here's a detailed comparison to help you decide which IPO to invest in.

KRN Heat Exchanger IPO

KRN Heat Exchanger's IPO is priced at Rs 220 per share at the upper band, with an issue size of Rs 342 crore. The IPO has been oversubscribed more than 55 times as of now. The company reported significant growth in net profit, jumping from Rs 10.6 crore in FY22 to Rs 32.3 crore in FY23, and further to Rs 39.1 crore in FY24. This surge is attributed to an increase in profit margins from 6.8% in FY22 to 13.1% in FY23, although there was a slight decline in FY24.

Key Points:

• Price: Rs 220 per share (upper band)
• Issue Size: Rs 342 crore
• Net Profit: Rs 39.1 crore in FY24
• Subscription: Over 55 times

Risks:

• Dependency on a few key customers.
• Vulnerable to geopolitical and supply chain uncertainties.

Expert Opinion: Reliance Securities recommends subscribing to the IPO, citing the company’s growth potential and consistent profitability.

Diffusion Engineers IPO

Diffusion Engineers' IPO is priced between Rs 159 to Rs 168 per share, with an issue size of Rs 158 crore. It has seen a subscription rate of 7.3 times. The proceeds will be used for capital expenditure, setting up a new manufacturing unit in Nagpur, Maharashtra, and funding working capital requirements.

Key Points:

• Price: Rs 159-168 per share
• Issue Size: Rs 158 crore
• Net Profit: Rs 308 crore in FY24
• Subscription: 7.3 times

Risks:

• Consolidation of manufacturing units in Nagpur poses risks in case of localized disruptions.

Expert Opinion: Anand Rathi Research recommends subscribing to the IPO, noting the fair valuation and the company's growth prospects.

Conclusion

Both KRN Heat Exchanger and Diffusion Engineers offer promising investment opportunities with robust growth trajectories. KRN Heat Exchanger showcases impressive profit margins and consistent profitability, making it a solid choice. On the other hand, Diffusion Engineers provides a balanced valuation and substantial growth potential, albeit with some geographical consolidation risks. Investors should weigh these factors based on their risk appetite and investment goals.