JNK India Limited is in the business of manufacturing the process fired heaters, reformers and cracking furnaces (together, the “Heating Equipment”) that are required in process industries such as for oil and gas refineries, petrochemical and fertilizer industries. They have capabilities in thermal designing, engineering, manufacturing, supplying, installing and commissioning Heating Equipment and cater to both domestic and overseas market. The Indian heating equipment market is closely competed among seven companies with JNK India Limited and Thermax Limited being the most prominent and comparable players. Over the years they have diversified into flares and incinerator systems and have been developing capabilities in the renewable sector with green hydrogen. In India, they have completed projects in, amongst others, Andhra Pradesh, Assam, Bihar, Karnataka, Kerala, Maharashtra, Tamil Nadu, West Bengal and globally have completed projects in Nigeria and Mexico. Further, they have ongoing projects in Gujarat, Odisha, Haryana, Rajasthan in India and globally in Oman, Algeria, and Lithuania. In recognition of the efforts, they have been accorded incentives by the Customers for early completion of projects in India and overseas. Further, in March 2022, they were recognised for the safety compliance by one of the private refinery companies of a multinational industrial conglomerate from Nigeria and were awarded a certificate of appreciation towards ‘Safety Compliance and Campaign Performance’. Also, in November 2022, they were awarded a certificate of appreciation by the same refinery company, for providing four million safe man-hours without a lost time incident and recognising the effective contribution towards installation of process fired heaters. As of December 31, 2023, they have served 21 Customers in India and 8 Customers overseas. Further, 7 out of the 12 oil refining companies in India, are the Customers and they have supplied or are in the process of supplying Heating Equipment to 11 of the 24 operating oil refineries across India. Some of the domestic Customers include Indian Oil Corporation Limited, Tata Projects Limited, Rashtriya Chemicals & Fertilizers Limited and Numaligarh Refinery Limited. Further they have catered to overseas Customers such as a leading engineering, procurement and construction ('EPC') company in Europe, a leading oil & gas exploration & production company in Oman and a middle east arm of European EPC company in oil and gas. Also they have enjoyed repeat orders from certain large domestic Customers such as Rashtriya Chemical & Fertilizers Limited, Tata Projects Limited, Numaligarh Refinery Limited and Indian Oil Corporation Limited. Likewise, they have executed 17 projects for JNK Global catering to their Customers in the overseas markets. JNK Global has also installed process fired heaters for its customer in Lagos, Nigeria, where one of the biggest refineries in the world (Dangote Refinery) is operated, having a capacity of 32.7 million metric tonnes per annum. All of the products are fabricated as per the Customer's requirements in accordance with applicable standards. Fabrication is undertaken in the in-house fabrication facilities and/or through third party fabricators. One of the premises is situated at multi-product special economic zone at Mundra, Gujarat, where fabrication is undertaken for export purposes only. It spreads over approximately 20,243 square meters with an installed capacity of 5,000 metric tonnes of fabrication and modularization per annum. Further, on situational basis and based on the requirement of the projects, they take certain facilities on lease basis and once the project is completed the facility is shut down and all the equipment and machinery is shifted to other facilities for other projects. The Order Book value of company was Rs 8,450.27 million on December 31, 2023, out of which Rs 7,292.02 million or 86.29% was from the Indian market and Rs 1,158.25 million or 13.71% was from the overseas market. As per financial performance, JNK India Limited has posted total income / net profits of Rs 138.45 Cr / Rs 16.48 Cr (FY21), Rs 297.14 Cr / Rs 35.98 Cr (FY22), Rs 411.55 Cr / Rs 46.36 Cr (FY23) and Rs 256.76 Cr / Rs 46.21 Cr (Q3 FY24). So as per previous financials data, company has shown good growth. Company has an average EPS of Rs 7.83 and average RoNW of 55.36% for last three fiscals. Issue is priced at a P/BV of 11.91 as per NAV of 34.84 as on 31.12.23. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 64.15, 49.79 and 37.46 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, two lead managers are associated with this IPO, and have handled around 66 IPOs in last three fiscals. IIFL Securities Limited: This is 29th Main Board IPO from this BRLM. From last 10 Main Board IPOs, three opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 Main Board IPOs, one is trading below issue price and remaining are trading above issue price.( As on 16.04.2024) ICICI Securities Limited: This is 39th Main Board IPO from this BRLM. From last 10 Main Board IPOs, three opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 Main Board IPOs, three are trading below issue price and remaining are trading above issue price.( As on 16.04.2024 ) As per financials, JNK India Limited has shown good growth, RoNW is 47.71% and P/E is respectively 64.15, 49.79 and 37.46 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced compared to peers. The Order Book value of company was Rs 8,450.27 million on December 31, 2023. Company is in the business of manufacturing the process fired heaters, reformers and cracking furnaces (together, the 'Heating Equipment'). The growth of the sector will be average. Performance of BRLMS are good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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