JK Files & Engineering Ltd IPO 

Last Updated on October 26, 2023 by BFSLTeam BFSLTeam

JK Files & Engineering Ltd, a subsidiary of Raymond Limited, is all set to launch an IPO. The company filed its initial papers with the market regulator SEBI in December 2021 for this purpose. Later, due to unfavourable market conditions, the application was withdrawn

JK Files & Engineering Limited IPO was supposed to be entirely an OFS IPO worth Rs. 800 crore. The company is a wholly-owned subsidiary of the leading apparel and fabric manufacturer, Raymond Ltd. It deals with precision-engineered parts for hardware and tools, power tool accessories, hand tools, and machines. 

JK Files & Engineering Limited IPO date, price, lot size, and other important details will be announced once the company refiles its DRHP. Now, let’s learn about the company’s business model, financials, strengths, and other factors.

About Company 

As per the CRISIL Report, JK Files & Engineering is the largest steel files manufacturer based on capacity installed and the second largest supplier of the same, globally. Also, it has a market share of 25% to 27% of global capacity as of FY20. 

The Raymond subsidiary deals in manufacturing, selling, and distributing engineering parts for hardware and tools. The tools include drills and steel files, power tool accessories, hand tools, and power tool machines. Also, its subsidiary, RPAL, deals in the making, selling, and distribution of automobile components such as flex plates, water pump bearings, and ring gears.

The company receives most of its revenue from national and global markets including Asia-Pacific, Europe, Africa, North America, and Latin America.  

Company Financials 

The following table lays down some crucial financial information about JK Files and Engineering. Potential investors might find this useful:

Parameters as Per the Year Ending On	March 31 2021	March 31 2020	March 31 2019
Total Assets	2,409.72	2,367.35	2,208.66
Total Liabilities	1,356.43	1,552.73	1,540.20
Total Expenses	3,153.19	3,606.16	3,786.55
Total Revenue	3,496.63	3,820.47	4,038.05
Profit After Tax	255.69	143.02	167.87
EBITDA	477.62	390.19	472.96
Earnings Per Share (EPS) (Basic) *	4.85	2.68	3.16
Earnings Per Share (EPS) (Diluted) *	4.13	2.28	2.69

*All values except EPS in rupee millions 

Also Read: Benefits of Investing in IPO

Strengths of JK Files & Engineering Ltd

Here are some unique facts and figures of JK Files and Engineering Ltd:

• The manufacturing business that the company is involved in is a complex one. It involves complex engineering processes that require a high level of precision. JK Files and Engineering is a market leader in such a complex business. 
• With an experience of over 7 decades in this industry, the company has gathered more than enough expertise, developed a wide sales and distribution network, and a stable customer base. 
• The company has received multiple awards and honours such as ‘Outstanding Exporter’ from DHL in 2007 and ‘Best Exhibitor’ at the National Hardware Show in 2019. It has received 22 awards from the Engineering Export Promotion Council between 1981 and 2020, and more for various categories.
• JK Files has a diverse product category inclusive of files, hand tools and power tool accessories, drills, and power machine tools. Hence, it caters to a wide range of industries and has an expansive customer base.
• The company has 730 active distributors all over India, and 1,50,000 outlets. Internationally, it is present in 55 countries with 135 active distributors.

Risks Involved in JK Files & Engineering Ltd

Along with its unique strengths, the company also has some underlying risks that can pose significant threats to its operations and cash flow. Here are a few: 

• The company is heavily dependent on a few of its customers for its revenue. The loss of any of these customers will result in a significant loss of revenue. 
• JK Files’ hardware and tools business depends largely on its domestic and international distribution network. Hence, if the company is unable to expand or manage the network efficiently, it will affect its cash flow, operations, and revenue. 

Summary 

JK Files & Engineering Limited IPO was supposed to launch through a book-building process. As it would entirely be an OFS, the raised fund would have been accrued by Raymond. The company has received a nod from the market regulator and is currently considering when to launch its IPO. The information will be available on this site when it’s announced.

Also Read: IPO investment strategy

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