JNK India Limited IPO Summary

About the Company:

Incorporated in 2010, 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. The company has capabilities in thermal designing, engineering, manufacturing, supplying, installing and commissioning Heating Equipment and cater to both domestic and overseas market. The company have been working closely with JNK Global a KOSDAQ listed company. JNK Global is also one of the Corporate Promoters of the Company with a shareholding of 25.79%

As of December 31, 2023, they have served 21 Customers in India and 8 Customers overseas. The company has completed projects in Andhra Pradesh, Assam, Bihar, Karnataka, Kerala, Maharashtra, Tamil Nadu, West Bengal in India and globally completed projects in Nigeria and Mexico. Further, ongoing projects are in Gujarat, Odisha, Haryana, Rajasthan in India and globally in Oman, Algeria, and Lithuania.

Industrial Overview:

Globally, heating equipment is a closely competed market. There are approx. 12-13 companies which manufacture process fired heaters, reformers, and cracking furnaces. Approximately 120,000 million of heating equipment have been ordered by the refineries from the countries of interest in calendar year 2023.

JNK Global is engaged in the design, manufacturing, installation, and maintenance of Fired Heaters and ranks amongst top three industrial use fired heater producer globally. The Company distributes its products within domestic market and to overseas markets. Based on the order booking in calendar year 2022, JNK India and JNK Global has 2% and 14% market share globally.

Revenue Segmentation:

Financials:

1. Revenue from operations increased by 37.42% from Rs 297 Crore in Fiscal 2022 to Rs 411 in Fiscal 2023. This increase was a primarily on account of increase in the revenue generated geography-wise and product wise.

2. EBITDA increased by 34.68% from Rs. 54 Crore in in Fiscal year 2022 to Rs. 73 Crore in 2023 in Fiscal year 2023. However, EBITDA Margin decreased marginally from 18.41% in Fiscal year 2022 to 18.05% in Fiscal year 2023 due to increase in prices of the raw material cost, which are not been able to pass on to the Customers.

3. The Company recorded an increase in profit after tax of 28.84% from Rs. 35.98 Crore in Fiscal year 2022 to Rs.46. 362 Crore in Fiscal year 2023.

4. ROCE and ROE have seen a decline in Fiscal Year 2023

Valuation: The company's P/E ratio stands at 43.63. Whereas, the average Industry P/E ratio is 149.46

Peer Comparison:

Key Risks:

Concentration of Revenue: The company derive a significant portion of the revenue from operations from orders which are contracted by Contracting Customers and JNK Global. Any kind of dissociation with JNK Global may have an adverse impact on the business, results of operations and cash flows.

High Working Capital Requirement: The Company has a high working capital requirement. So, they may require alternate funding in Fiscal 2024 and Fiscal 2025 post the utilization of Net Proceeds and if the Company is unable to raise sufficient working capital, the operations of the Company will be adversely affected.

IPO Objectives:

The Company proposes to utilize the Net Proceeds towards funding the following objects:

1. Funding working capital requirements

2. General corporate purposes

IPO Details: