JNK India stock makes strong debut, lists at 50% premium over issue price

JNK India stock made a strong market debut on Tuesday with its shares getting listed at Rs 621, a 50 per cent premium over its issue price of Rs 415 per share on the National Stock Exchange (NSE). Post listing, the stock moved to an intraday high of Rs 665, 60 per cent up over issue price.

At 10:02 am, JNK India stock was trading at Rs 651, 57 per cent higher than issue price, with around 6.19 million equity shares changing hands on the NSE, data shows.

Analysts said JNK India's listing defied even optimistic pre-listing forecasts with a spectacular debut on the stock exchanges.

"This impressive listing significantly surpassed the anticipated 30 per cent 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," said Shivani Nyati, head of wealth, Swastika Investmart.

Existing investors, she added, may hold their shares with a stoploss at Rs 560.

The initial public offer (IPO) of the heating equipment maker had received a good response from investors and was subscribed 28.07 times. The qualified institutional buyers (QIBs) portion saw a subscription of 74.40x, while the non-institutional investor segment subscribed 23.80x, and the retail individual investors portion by 4.20x, data shows.

JNK is engaged in the design, manufacture, supply, installation, and commissioning of process-fired heaters, reformers and cracking furnaces (Heating Equipment) required in process industries such as for oil and gas refineries, petrochemical and fertilizer industries.

JNK has evolved as one of the key players to capitalise on the upcoming demand of Heating Equipment completing the value chain in Heaters, Reformers and Cracking Furnace over the past few years.

The geographical expansion with focus on high growth markets to capitalise on the industry tailwinds worldwide as there are a total of 53 refineries expected to be commissioned in 21 countries by CY30 as per F&S report and heating equipment accounts for 3.3 per cent of the total capex estimated at $186 billion.

Analysts at Reliance Securities expect the order book to see improvement with new businesses and improved prospects for the oil-gas and fertilizer sectors. JNK India has the global parentage, skilled and experienced promoter’s holding respective backgrounds in their line of business are the added advantages.

"JNK India is well placed to capitalise on the Global as well as Indian capex unfolding in the oil and gas, petrochemicals and fertilizer industries. With the heating equipment industry having limited players due to high entry barriers, JNK has been able to command strong Ebitda margins of 17 per cent and generate ROCE of 40 per cent in FY23," the brokerage firm said.

JNK has delivered growth and return ratios which are superior to comparable companies while its valuation is at the lower end of the range. Based on favourable industry structure with limited competition and strong pipeline of orders, analysts at Nirmal Bang Securities are positive on JNK India.