KRN Heat Exchanger IPO: GMP falls post allotment, can it still be multibagger?

The allotment of shares for the initial public offering (IPO) of KRN Heat Exchanger and Refrigeration was finalised on September 30.
However, following the allotment, the grey market premium (GMP) for the company’s stock has experienced a decline.
This has lowered expectations for the listing day gains that investors had hoped for. Despite this, there is still potential for the stock to perform well in the market. The company’s shares are scheduled to be listed on Thursday, October 3.
The GMP for KRN Heat Exchanger, as of the latest update, stands at Rs 240 per share. This indicates that investors can expect a listing gain of just over 110% on the issue price.
However, prior to the announcement of the allotment status, the GMP was at Rs 270 per share, suggesting an even higher listing gain of around 125%. The correction in the grey market premium has tempered expectations but has not eliminated the possibility of a strong debut.
KRN Heat Exchanger and Refrigeration Limited (KHERL) managed to attract huge interest from investors during the bidding process.
According to Sagar Shetty, a research analyst at StoxBox, the company is well-positioned in its sector and could benefit from long-term market trends. He advises investors who received shares in the allotment to consider booking profits on listing day but notes that future recommendations will depend on the company’s financial performance.
The IPO had a price band of Rs 209-220 per share with a lot size of 65 shares. It was open for bidding from September 25 to 27, aiming to raise approximately Rs 341.95 crore through the sale of 1,55,43,000 fresh equity shares.
The IPO saw overwhelming demand across all categories, with the overall issue subscribed an impressive 214.42 times. The portion reserved for Qualified Institutional Buyers (QIBs) was oversubscribed 253.04 times, and Non-Institutional Investors (NIIs) subscribed to the issue 431.63 times. Retail investors also showed strong interest, with their portion subscribed 98.29 times.
KRN Heat Exchanger and Refrigeration is based in Rajasthan and operates as a leading manufacturer of heat exchangers. Their products include fin and tube-type heat exchangers, copper and aluminium fins, copper tubes, water coils, condenser coils, and evaporator coils. These products are primarily used in heating, ventilation, air conditioning, and refrigeration (HVACR) systems across domestic, commercial, and industrial sectors.
Shivani Nyati, Head of Wealth at Swastika Investmart, said that the company’s fundamentals are strong, and the IPO was fairly priced.
She added that the robust market demand for KRN Heat Exchanger’s products suggests a positive outlook for its stock market debut.