JNK India share lists at 50% premium over IPO price; surges up to 62% post debut
The initial public offering (IPO) of JNK India Limited, the manufacturer of process heating equipment, made a strong debut on the stock exchanges on Tuesday, in sync with a positive broader market. The shares of JNK India listed at ₹621 on the NSE, a premium of 49.6% over the IPO price of ₹415 apiece. On the BSE, the stock opened at ₹620, up 49.4% over the issue price.
Post listing, JNK India shares surged as much as 62.5% to hit a high of ₹674.4 on the BSE and NSE, while the market capitalisation rose to ₹3,684 crore.
The debut of JNK India was better than Street expectations as the stock was commanding a grey market premium (GMP) of ₹135 apiece over the issue price in the unofficial market, indicating the listing to be around ₹550 per share, up 32.5% over the issue price.
Prashanth Tapse, Senior VP (Research), Mehta Equities, in his pre-listing views, says, “The positive secondary market environment and healthy subscription demand on the last day of the issue gives good room for healthy listing around 22-25% premium against the issue price of ₹415 per share.”
Tapse believes that the listing is justified due to its niche market leadership in heating equipment completing the value chain in heaters, reformers and cracking furnace along with a strong track record of over a decade. Furthermore, JNK India's expansion into waste gas handling and renewable energy systems showcases its adaptability and readiness to capitalise on emerging market opportunities. "Based on annualized FY 2024 earnings and fully diluted post-IPO paid-up capital, the company was asking a PE of 37.46x which seems the valuations were reasonably priced when compared to peers," he adds.
Tapse recommended conservative investors to book profits, while he suggested risk taking investors to ‘HOLD’ shares for long term perspective. “Considering the favourable outlook for India's oil & gas and hydrogen sectors, along with JNK India's solid financial track record, notable clientele and ambitious expansion objectives, the company stands poised for substantial growth.”
Meanwhile, Shivani Nyati, Head of Wealth, Swastika Investmart Ltd., says that JNK India defied even optimistic pre-listing forecasts with a spectacular debut on the stock exchanges. “This impressive listing significantly surpassed the anticipated 30% premium predicted by the grey market, underscoring the overwhelming investor confidence in JNK India's future potential.”
“While the initial surge might be followed by some volatility, the strong fundamentals and positive outlook suggest long-term potential,” she says.
Nyati suggested existing investors to ‘Hold’ their shares with a stop loss at ₹560 and monitor the performance closely.
JNK India raised ₹649.47 crore via the IPO, which was a combination of fresh issue of 0.76 crore shares worth ₹300 crore and offer for sale of 0.84 crore shares aggregating to ₹349.47 crore. The company intends to use the net proceeds raised from the fresh equities to meet working capital requirements and general corporate purposes.
The issue, which opened between April 23-25, was subscribed 28.46 times. The IPO was booked 4.20 times in the retail segment, 74.40 times in QIB, and 23.80 times in the NII category. The price band was fixed at ₹395-415 per share and the minimum lot size was 36 shares.
A day before the opening of the issue, JNK India raised ₹194.84 crores from anchor investors, which saw participation from some marquee investors such as Goldman Sachs, Kotak MF, HDFC MF, Nippon MF, Mirae Asset fund, DSP, LIC MF, Bajaj Allianz Life Insurance and Aditya Birla SunLife Insurance.
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