KRN Heat Exchanger Invests Rs 236 Crore In Subsidiary To Finance Expansion
The investment is in compliance with plans to use proceeds from the KRN Heat Exchanger IPO to expand the HVAC Products manufacturing facility in Rajasthan.
KRN Heat Exchanger and Refrigeration Ltd. invested Rs 236 crore by subscribing to the rights issue in subsidiary KRN HVAC Products Pvt., according to an exchange filing on Monday.
KRN Heat Exchanger acquired approximately 1.18 crore equity shares having a face value of Rs 10 apiece at a price of Rs 200 each. The investment is in compliance with plans to use proceeds from the initial public offering to expand the KRN HVAC manufacturing facility in Rajasthan's Neemrana, it said.
This investment will help KRN HVAC inter alia in financing the cost towards its expansion plans, the parent firm said.
KRN HVAC was incorporated on April 7, 2023, and is engaged in the business of manufacturing condenser, evaporator and other related products for the heating, ventilation, air-conditioning industry.
KRN Heat Exchanger manufactures fin and tube-type heat exchangers for the heating, ventilation, air-conditioning, and refrigeration industry. The Rajasthan-based company's entire manufacturing operations are carried out at its consolidated manufacturing facility, comprising two industrial plots, at the Riico Industrial Area in Neemrana.
It raised funds via an IPO in October. Chairperson Santosh Yadav had said the new facility was currently under construction and expected to start production early next year.
"We believe this is a very under-penetrated industry that aligns with India's consumption growth story. Currently, the usage of air conditioners, refrigerators, and other air-conditioned products is still quite low in India, but we see this changing as the economy grows," Director Ashok Holani said on broader industry outlook.
He also said the demand for heat exchangers, an essential component for air conditioning units, was expected to rise significantly.
"We manufacture a range of heat exchangers for the commercial air conditioning segment, using premium technology. With the new facility funded by the IPO proceeds, we will be able to enhance our production capabilities and meet not only domestic but also international demand," Holani said.
Shares of KRN Heat Exchanger closed 0.75% lower at Rs 784.55 apiece on the National Stock Exchange, compared to a 1.32% advance in the benchmark Nifty 50.
