Santosh Kumar Yadav, a 44-year-old first-generation entrepreneur from Tijara, Rajasthan, is all set to launch a Rs 340 crore Initial Public Offering (IPO) for his company, KRN Heat Exchangers and Refrigeration. The IPO will open on September 25, 2024, and aims to fund the expansion of their manufacturing capabilities.
Company Background
Early Beginnings
Yadav's journey from a trainee operator at Lloyd Electric and Engineering to the founder of KRN Heat Exchangers and Refrigeration is a testament to his dedication and hard work. After leaving Lloyd in 2013, he co-founded Micro Coils and Refrigeration in Bhiwadi, Rajasthan, which he later sold in 2017 before incorporating KRN Heat Exchangers and Refrigeration.
Growth and Expansion
KRN Heat Exchangers and Refrigeration specializes in manufacturing aluminium and copper fin tube condenser and evaporator coils for the HVAC&R industry. The company started manufacturing in 2018 and now operates in 17 states in India and exports to nine countries, including the US, Canada, Italy, and Germany. The company has demonstrated consistent growth, with consolidated revenue reaching Rs 308.28 crore in FY24.
Financial Performance
- Revenue Growth: The company has achieved a Compound Annual Growth Rate (CAGR) of 25.46% over the last three years.
- Profitability: KRN posted a net profit of Rs 39.07 crore in FY24, with a return on equity of 40.86% and a return on capital employed of 31.21%.
- Customer Base: For FY24, KRN had a customer base of over 115, with significant revenue contributions from top clients like Daikin Airconditioning India.
IPO Details
Objectives of the Issue
- Investment in Subsidiary: Rs 242.46 crore will be invested in the wholly-owned subsidiary KRN HVAC Products to set up a new manufacturing facility in Neemrana, Alwar, Rajasthan.
- General Corporate Purposes: The remaining funds will be used for general corporate purposes.
Shareholding and Valuation
- Price Band: The price band for the IPO is set at Rs 209-220 per share.
- Shareholding Post-Issue: Post-IPO, promoter shareholding will decrease from 94.39% to 70.79%.
- Market Premium: As of September 23, KRN shares were trading at a 101% premium in the unlisted market.
Listing and Management
- Stock Exchanges: Shares will be listed on BSE and NSE.
- Book-Running Lead Manager: Holani Consultants Private Limited is the sole book-running lead manager for the IPO.
Conclusion
Santosh Kumar Yadav's entrepreneurial journey from a small town in Rajasthan to launching a significant IPO is inspiring. KRN Heat Exchangers and Refrigeration's consistent growth, robust financial performance, and strategic expansion plans make it a promising venture in the HVAC industry.