JNK India Limited IPO

Last Updated on October 10, 2023 by BFSLTeam BFSLTeam

JNK India is a leading heating equipment manufacturer in India. The company has recently filed its draft papers with SEBI intending to launch an Initial Public Offering. The IPO will comprise a fresh issuance of shares amounting to Rs. 300 crore and an OFS of 8.4 million shares. It’s yet to receive a green signal from the market regulator.

If you’re interested in investing in the upcoming JNK India IPO, go through this blog. It mentions the crucial details about this company, its strengths, risks involved, and more.

Also Read: IPO investment strategy

About the Company 

JNK India is a company that has capabilities in thermal designing, engineering, manufacturing, supplying, commissioning, and installing process-fired heaters, cracking furnaces, and reformers. The company has served its customers with care both in India and abroad. 

Since the inception of JNK Limited, the company has worked closely with JNK Heaters which is a company listed on KOSDAQ. The relationship between JNK India and JNK Heaters is collaborative and independent as well. 

JNK India shares a long-standing relationship with its customers. It has helped them to have a better understanding of the diverse needs of their customers and offer customised solutions. The company has a demonstrated track record of product development and execution which has lent it a competitive edge.

JNK India IPO Objectives and Details 

JNK India, a heating equipment maker, has filed a Draft Red Herring Prospectus (DRHP) with SEBI to raise Rs. 300 crore via a fresh issue of shares. The upcoming IPO will also feature an offer for sale of 84,21,052 equity shares with a face value of Rs. 2 per share. The OFS participants include four promoters and one investor shareholder. 

JNK India may consider issuing equity shares worth Rs. 60 crore via a private placement before filing its Red Herring Prospectus. What will happen if this company undertakes a pre-IPO placement? The amount equivalent to Rs. 60 crore will be deducted from the size of this fresh issue. 

JNK India will use the proceeds from its IPO to fulfil its working capital requirements. It will utilise approximately Rs. 275.72 crore for this purpose. The rest will be utilised for general corporate purposes. 

Strengths 

You must check the strengths of a company before investing in its IPO. It will help you understand whether the company has been performing well financially if it has a sustainable business model and its future scope. Also, assess if the company has a competitive edge in the market. 

Check the strengths of JNK India Limited below: 

• JNK India Limited is the market leader for processed fire heaters with an established track record to back its claim. 
• The company is positioned well enough to capture industry tailwinds. Moreover, the company has demonstrated capabilities as an industry leader over some time. 
• Its product portfolio is quite diversified and well-capable catering to a wide range of industries. 
• JNK India has delivered a strong financial performance over the previous few years. Over the previous three financial years, the company has shown steady growth in revenue from operations, EBITDA and profit after tax.
• Its promoters and management team members are quite skilled and experienced. The company has a loyal employee base committed to its growth. 

Risks Involved 

It would be wise to take into consideration the risks involved with investing in any IPO. You need to have a good understanding of the factors that can negatively affect a business’s profits before investing in it. Here are the notable risks involved with JNK India Ltd:

• Failure to obtain new contracts may harm the company’s revenue and cash flow. It would also hurt the company’s overall financial situation.
• The company’s growth rate, Order Book, and the total number of orders received in the past don’t indicate whether it’ll receive as many orders in the future. Moreover, if there’s any delay in executing the orders, there would be a negative impact on cash flow, revenue from operations, and the financial condition of the company.
• If there’s a fall in the capital expenditure of oil and gas, petrochemical, and fertiliser industries, there might be an adverse impact on JNK India’s cash flow and revenue. 

Also Read: Risk of investing in IPO

Summary 

To sum up, JNK India is a leading heating equipment manufacturer in India which has recently filed its DRHP with SEBI for launching its IPO. It has an established track record of good financial performance. Experts who keep track of the financial metrics of the company expect it to grow further in the coming years.

If you wish to invest in its IPO, don’t forget to take into account its strengths and risks involved as it’ll help you to align your investment with your financial requirements. 

JNK India Limited IPO FAQs