JNK India IPO: GMP rises sharply ahead of listing on Tuesday; Here's what to expect

Shares of JNK India are set to make a strong debut at Dalal Street on Tuesday, April 30 and if it goes by the current trends from the grey market, the company may deliver a strong listing pop in its maiden trading session. The company is witnessing a strong demand in the unofficial market.

A day before its debut, shares of JNK India were commanding a grey market premium (GMP) of Rs 120-125 apiece, which can be translated into listing gains of about 30 per cent over the issue price of 415 apiece. However, the premium in the unofficial market stood at merely Rs 25 when the issue has close for bidding.

Market participants also second the notion of a strong listing for the company considering its sound financials, robust order books, reasonable valuations and solid interest from the institutional bidders. The foresee a decent return for the investors on the listing.

JNK India, a manufacturer of process heating equipment, is gearing up for a potential blockbuster listing on the stock exchange. The IPO has generated significant investor interest, receiving a healthy subscription. The grey market premium currently sits at Rs 125, translating to a premium of 30 per cent, fueling optimism, said Shivani Nyati, Head of Wealth, Swastika Investmart.

"JNK India boasts a robust order book valued at Rs 845 crore, indicating strong near-term growth potential. The IPO valuation of 43 times P/E appears to be fairly priced considering the company's growth prospects and strong order book. This, combined with the high subscription and positive GMP, suggests a strong listing with the potential for significant gains," she said.

The IPO of JNK India ran between April 23 and April 25. The Thane-based company had offered its shares in the fixed price band of Rs 395-415 per share with a lot size of 36 shares. The company raised a little more than Rs 649.47 crore via its primary offering, which included a fresh share sale of Rs 300 crore and an offer-for-sale (OFS) of up to 84,21,052 equity shares.

The issue was overall subscribed more than 28.13 times. The quota for qualified institutional bidders (QIBs) was booked a solid 75.72 times The quota for non-institutional investors was subscribed 23.26 times. The portions reserved for retail investors saw bidding for 4.11 times during the three-day bidding process.

Prashanth Tapse, Senior VP (Research), Mehta Equities believes JNK India to deliver a listing pop of around 25 per cent to the investors, thanks to its niche market leadership along with a strong track record of over a decade. "We recommend booking profits for allotted conservative investors while risk-taking investors can 'hold' it for long term perspective,” he said.

Incorporated in 2010, JNK India is engaged in the design, manufacture, supply, installation, and commissioning of process-fired heaters, reformers and cracking furnaces. IIFL Securities and ICICI Securities are the book running lead managers of the JNK India IPO, while Link Intime India is the registrar for the issue.