JNK India Files DRHP With SEBI For IPO

JNK India Ltd., a company headquartered in Mumbai, has submitted its Draft Red Herring prospectus (DRHP) to the capital market regulator Sebi in order to raise funds for its initial public offering (IPO). The IPO with a face value of Rs 2 consists of a fresh issue of up to Rs 300 crore and an offer for sale (OFS) of up to 8.42 million equity shares by the Promoter and other selling shareholders.

Up to 1.19 million equity shares from Goutam Rampelli, up to 8.67 lakh equity shares from Dipak Kacharulal Bharuka, up to 2.18 million equity shares from JNK Heaters Co. Ltd., up to 3.94 million equity shares from Mascot Capital and Marketing Private Limited, and up to 4.19 lakh equity shares from Milind Joshi are included in the offer for sale. The 275.72 crore in fresh issue proceeds would be used, according to the DRHP, for funding working capital requirements and general corporate purposes.

The offer is being made through the book-building process, in which not less than 15% of the offer shall be available to non-institutional investors, 35% for retail individual investors and 50% of the offer will be allocated on a proportionate basis to qualified institutional buyers.

In conjunction with the issue's lead bankers, the company could think about issuing additional equity shares totalling up to Rs 60 crore (a "Pre-IPO Placement"). The size of the new issue will be lowered if such placement is successful.

According to F&S Report in the DRHP, JNK is one of the largest companies in India that specialises in process-fired heaters, holding a sizable market share of about 27% for new order bookings during Fiscal 2023 within the Indian Heating Equipment industry. It has an order book worth Rs 868.27 crore as of March 31, 2023, which is six times as much as Rs 143.58 crore at the end of March 2021.

The company, which has functions in thermal designing, engineering, manufacturing, supplying, installing, and commissioning process-fired heaters, reformers, and cracking furnaces, is one of the top heating equipment companies in India in terms of new order booking between the fiscal years of 2021 and 2023. As of March 31, 2023, it had seven clients internationally and 17 clients in India. Companies like Indian Oil Corporation Limited, Tata Projects Limited, Rashtriya Chemicals & Fertilisers Limited, and Numaligarh Refinery Limited are examples of notable domestic clients. A well-known engineering, procurement, and construction ("EPC") company in Europe, a significant oil and gas exploration and production company in Oman, and a Middle Eastern branch of a European EPC corporation in the oil and gas industry are also among the company's foreign clients.

The consolidated revenue from operations for the fiscal year 2023 grew by 37.42% to Rs 407.30 crore from Rs 296.40 crore the previous year, principally due to an increase in revenue earned geographically and by-products. From Rs 35.98 crore in the fiscal year 2022 to Rs 46.36 crore in the fiscal year 2023, net profit grew by 28.84%. The company derives 16.17% of its revenue from the petrochemical sector and 77.25% from the oil and gas business. The remainder of its income is generated by the fertiliser industry and numerous other businesses.

The company has had a close partnership with KOSDAQ-listed JNK Heaters ever since it was founded. With a 25.79% stake as of the date stated in the Draft Red Herring Prospectus, JNK Heaters is one of the corporate promoters of the company as well.

The book-running lead managers for the offer are IIFL Securities Limited and ICICI Securities Limited, while Link Intime India Private Limited is the registrar. The equity shares of the company are proposed to be listed on BSE and NSE.