Dedication and hard work define perfectly the first-generation entrepreneur and farmer’s son Santosh Kumar Yadav (44), who hails from Tijara, a small town in Rajasthan.
His efforts helped him rise from a trainee operator at Lloyd Electric and Engineering to becoming the founder of KRN Heat Exchangers and Refrigeration. Meanwhile, after leaving Lloyd Electric and Engineering in 2013, he and an investor founded Micro Coils and Refrigeration in Bhiwadi, Rajasthan. He sold his stake in the company in 2017 and incorporated KRN Heat Exchangers and Refrigeration.
The company is in the business of manufacturing aluminium and copper fin tube condenser and evaporator coils used by OEMs in the heating, ventilation, air conditioning and refrigeration (HVAC&R) industry. Their coils are used in heating equipment, ventilation equipment and cooling or air-conditioning equipment used in domestic, commercial and industrial HVAC systems to control the air's temperature, humidity and purity.
His company, which started manufacturing in 2018, now sells products in at least 17 states in India and exports to nine countries including the US, Canada, Italy and Germany. KRN Heat Exchangers and Refrigeration has grown from a single product to a multi-product manufacturing company, demonstrating consistent growth in terms of revenues and profitability.
KRN Heat Exchangers and Refrigeration, which posted consolidated revenue of Rs 308.28 crore in FY24, is set to launch the initial public offering (IPO) on September 25. Return on equity and return on capital employed stood at 40.86% and 31.21%, respectively in the previous financial year. Overall, the company’s revenue from operations has increased at a CAGR of 25.46% in the last three years.
With a price band of Rs 209-220, the company aims to raise up to Rs 342 crore from the forthcoming initial public offering. Shares of the company are proposed to be listed on BSE and NSE. Shares of KRN were available at a premium of 101% in the unlisted market on September 23, according to IPO Premium.
“The company is profitable from Day 1 and we don’t have any competitor in the listed space,” said Yadav in a media roundtable in August. KRN Heat Exchangers and Refrigeration posted a net profit of Rs 39.07 crore in FY24.
For FY24, the company had a base of more than 115 customers, diversified across geographies. According to Axis Capital, KRN Heat Exchangers and Refrigeration derived 33.34%, 32.85% and 32.28% of revenue for the years FY24, FY23 and FY22 from Daikin Airconditioning India and further it generated 72.31%, 70.87% and 75.82% of revenue from the top 10 key customers for FY24, FY23 and FY22, respectively.
The objective of the issue is to invest Rs 242.46 crore in the wholly-owned subsidiary KRN HVAC Products in the form of equity, for setting up a new manufacturing facility at Neemrana, Alwar, Rajasthan and rest for the general corporate purposes.
KRN HVAC Products will focus on manufacturing certain types of heat exchangers that are currently not manufactured by the company. Post the public issue, the shareholding of promoters will decline to 70.79% from 94.39%. Holani Consultants Private Limited is the sole book-running lead manager to the issue.