JNK India IPO opens today; Here's what a host of brokerage firms say for issue

JNK India IPO opens today; Here’s what a host of brokerage firms say for issue

The Rs 650 crore-initial public offering (IPO) of JNK India will open for bidding today, that is, Tuesday, April 23. The company is offering its shares in the range of Rs 395-415 apiece. Investors can bid for a minimum of 36 equity shares and its multiples thereafter. The issue will close for bidding on Thursday, April 25.

Incorporated in 2010, JNK India is engaged in the design, manufacture, supply, installation, and commissioning of process-fired heaters, reformers and cracking furnaces. The manufacturing is done at the in-house manufacturing facilities and/or third-party vendors.

The IPO of JNK India includes a fresh share sale of Rs 300 crore and offer-for-sale (OFS) of up to 84,21,052 equity shares by its promoters and other selling shareholders, amounting to Rs 349.47 crore at the upper end of the price band. The net proceeds from the issue shall be utilized towards  the working capital requirements and general corporate purposes.

JNK India has raised Rs 194.84 crore from anchor investors by allocating 46,94,989 shares at Rs 415 apiece. Goldman Sachs, Allianz Global Investors Fund, Natixis International Funds, Kotak Mutual Fund, HDFC Mutual Fund, Nippon Life India, Mirae, DSP Mutual Fund, Edelweiss Trusteeship, LIC Mutual Fund, Bajaj Allianz Life Insurance and Aditya Birla Sun Life Insurance participated in the anchor book.

Thane-based JNK India has completed projects in Andhra Pradesh, Assam, Bihar, Karnataka, Kerala, Maharashtra, Tamil Nadu and West Bengal and has implemented projects globally, including in Nigeria and Mexico. The company has served over 17 clients in India and seven clients overseas as of March 31, 2023.

The domestic clients of JNK India include Indian Oil Corporation, Tata Projects, Rashtriya Chemicals & Fertilizers and Numaligarh Refinery. One of the manufacturing facilities is located in the Multi-Product Special Economic Zone in Mundra, Gujarat, where production is exclusively for export.

For the nine-months ended December 31, 2023, JNK India reported a net profit of Rs 46.21 crore with a revenue of Rs 256.76 crore. The company’s net profit came in at Rs 46.36 crore with revenue of Rs 411.55 crore for the financial year ended on March 31, 2023.

JNK India has reserved 50 per cent of the net offer for the qualified institutional investors (QIBs), while non-institutional investors (NIIs) will get 15 per cent of shares. Retail investors will get 35 per cent of the net offer.

IIFL Securities and ICICI Securities are the book running lead managers of the JNK India IPO, while Link Intime India is the registrar for the issue. Shares of the company are likely to be listed at both the bourses- BSE and NSE on April 30, Tuesday. Here’s what a host of brokerage firms said about the IPO of JNK India:

Reliance Securities

Rating: Subscribe

JNK India has evolved as one of the key players to capitalize on the upcoming demand of heating equipment completing the value chain in heaters, reformers and cracking furnaces over the past few years. The geographical expansion with focus on high growth markets to capitalize on the industry tailwinds worldwide, said Reliance Securities.

“We expect the order book is expected to see improvement with new businesses and improved prospects for the oil-gas and fertilizer sectors. JNK has the global parentage, skilled and experienced promoter’s holding respective backgrounds in their line of business are the added advantages. Hence, we recommend an ‘subscribe’ to the issue,” it added.

Anand Rathi Research

Rating: Subscribe

JNK India has an established track record with a diverse customer base with well-positioned to capture industry tailwinds through their demonstrated capabilities over time and diversifying product portfolio to cater to varied industries along with demonstrated financial performance with a robust order book reflecting revenue visibility for the last three fiscals, said Anand Rathi Research.

“At the upper price band, the company is valuing at P/E of 49.38 times, EV/Ebitda 33.13 times with a market cap of Rs 2,308.2 crore post issue of equity shares and return on net worth of 47.71 per cent. We believe that the IPO is fairly priced and recommend a ‘subscribe for long term’ rating to the IPO,” it said.

Choice Broking

Rating: Subscribe

JNK India independently has the capabilities to meet the domestic heating equipment demand, while for the overseas markets, it has a business collaboration with JNK Global, which is among the top-3 process-fired heater producers globally. With a dominant share and asset-light operations, JNK is well placed to capitalize the demand growth in the medium-term, said Choice Broking.

“We believe there is no peer having a product-line similar to the JNK India. The above peers considered are having diversified operations. At a higher price band, JNK is demanding a P/E multiple of 49.8 times, which is at a significant discount to the peer average. Thus, considering the niche product profile and medium-term growth prospects,” it said with a ‘subscribe’ rating.

Swastika Investmart

Rating: Subscribe

The business of JNK India is producing heating equipment used for process industries like petrochemicals, fertilizer, and oil and gas refineries. The business has branched out into flares and incineration systems and is aiming to enter the renewable energy market, concentrating on green hydrogen, said Swastika Investmart in its note.

“Regarding financial performance, the organization has done well during the previous three fiscal years. The business has carved out a niche for itself in the heating equipment category and has seen growth in both its top and bottom lines over the periods

under review. The IPO valuation is fairly priced. Investors may apply for this IPO with a long-term view,” it added.

StoxBox

Rating: Subscribe

In terms of valuation, despite demanding a P/E multiple of 49.8 times at the higher price band, JNK India presents an attractive proposition, given the company’s unique product profile and promising growth prospects, said StoxBox. “Considering the financial metrics, market dynamics, and valuation multiples, we maintain a positive outlook on JNK India,” it added with a ‘subscribe’ rating.

SMIFS

Rating: Subscribe

JNK India has a 27 per cent market share in the Indian heating equipment market and is well poised to grow from the rising demand in the industry. The overall demand for heating equipment from Indian refineries, petrochemicals, and fertilizer segments between FY24 and FY29 is estimated at Rs 27,089 crore, said analysts from SMIFS Ltd.

“The company is also in the process of licensing or acquiring companies in the heating equipment segment to capture the growing global demand. We recommend a subscription to the issue, as with a robust orderbook and JNK’s intention to diversify revenue growth by addressing industries like renewable energy the company is looking at a strong double digit growth,” it said.

Watch Live TV in English

Watch Live TV in Hindi