JK Files & Engineering Limited has filed preliminary documents with SEBI for an initial public offering (IPO) of Rs 800 crore from promoters. Precision-engineered components are manufactured, marketed, and distributed by the company.
JK Files Engineering Ltd. manufactures, sells, and distributes precise engineering components for tools and hardware such as steel files and drills. They also promote, sell, and distribute power tools, hand tools, and power tool machines. JK Files has the biggest installed manufacturing capacity of steel files in FY20, accounting for 25–27% of global capacity. They have a considerable presence in Africa, Asia, and Latin America, and they are a major brand in the African market. As of the first quarter ended June 30, 2021, exports accounted for 52.99% of revenue.
JK Files’s power tool machines have a pan-India distribution network of 730 active distributors and a retail capacity of more than 150,000 outlets spread across 600 towns in the country. The company also exports drills and files to more than 55 countries across the globe. As of June 30, 2021, the company had 135 active distributors internationally. They provide files and drills to companies like Apex Tools Group, LLC. JK Files and Engineering is the only manufacturer of flexplates in India, and it caters to approximately 25–27% of the flexplate volume demand for domestic production in FY21.
JK Files & Engineering Ltd. IPO Objective
- Since the IPO is an offer for sale, the company will not receive any proceeds from selling equities.
JK Files & Engineering Financial Highlights
| Particulars | FY21 | FY20 | FY19 |
|---|---|---|---|
| Revenue From Operation | 3,442.55 | 3,759.86 | 4,013.33 |
| EBITDA | 477.62 | 390.19 | 472.96 |
| EBITDA Margin (%) | 13.66 | 10.21 | 11.71 |
| Profit After Tax | 255.69 | 143.02 | 167.87 |
| EPS | NA | NA | NA |
| ROE | 24.81 | 17.85 | 25.72 |
JK Files & Engineering Ltd. IPO Noteworthy Highlights:
- The company has a presence in 55 countries and a robust network of 135 active distributors.
- The company’s total income was Rs 5,532.97 million in fiscal 2021.
- The company is net debt-free on the pro forma level as of June 2021.
JK Files & Engineering Pros & Cons:
Strengths
- JK Files and Engineering holds a leadership position in precision engineering and automotive components, which require high quality and has a very low margin of error
- The company has a very diverse portfolio which has a wide range of applications across various segments and industries
- The risk which could potentially be faced by the company has been mitigated to a certain extent due to a high amount of diversification across geographies and customers
- They have a strong and long-term relationship with their distributors
- They have the support of the well-established Raymond Group
Risks
- The sale of the company’s products are totally dependent on their distribution network. If there is any disruption in the network or the company is unable to expand and grow their network, it will adversely affect the operations and financials of the company
- The company is exposed to many risks in the international market
- JK Files and Engineering is subject to various strict quality requirements and any product defects by the suppliers will affect the reputation of the company
- A large part of the revenue is derived from a few select products
JK Files & Engineering Competitive Peers
| Company Name | Total Income | P/E (on December 2021) | EPS in Rs |
|---|---|---|---|
| Rolex Rings | 6,198 | 31.02 | 35.96 |
| Sansera Engineering | 15,724 | 37.28 | 20.55 |
| Craftsman Automation | 15,700 | 47.56 | 48.32 |
| NRB Bearings | 7,775 | 30.04 | 5.58 |
| Timken India | 14,301 | 106.00 | 19.03 |
JK Files & Engineering Ltd. IPO FAQs
Q1. What is the JK Files & Engineering Ltd. IPO?
Ans. The public issue consists of fresh shares worth Rs 300 crore and up to 89 lakh equity shares on an offer for sale.
Q2. When will JK Files & Engineering Ltd. IPO allotment be available?
Ans. Details not available.
Q3. What will be the JK Files & Engineering Ltd. IPO lot size?
Ans. Details not available.
Q4. When will the JK Files & Engineering Ltd. IPO open for subscription?
Ans. Details not available.
Q5. What minimum lot size can retail investors subscribe to?
Ans. Retail investors can apply for a minimum of one lot.
Q6. When will JK Files & Engineering Ltd. list on exchanges?
Ans. It usually takes ten working days from the last day of subscription to list the IPO on the bourses.
Q7. What would be the listing gains on the JK Files & Engineering Ltd. IPO?
Ans. Listing gain is the difference between the IPO’s opening and offer prices.
The listing gain results from changing investors’ interests, global parameters, and short vs long-term outlooks.
Q8. I have finished the application process for the JK Files & Engineering Ltd. IPO, but the funds are not yet debited. What is the reason?
Ans. The bank initially blocks the amount you bid for an IPO. It will debit the amount when the shares get allotted or unblock it after the UPI mandate expiry date.
Q9. How do I approve the UPI mandate request for the JK Files & Engineering Ltd. IPO?
Ans. Login to your UPI handle and approve the payment mandate to complete the IPO application process.
Q10. Can I submit more than one application for the public issue of JK Files & Engineering Ltd. using one PAN?
Ans. You can submit only one application using one PAN card.
Q11. What is the minimum order quantity for the JK Files & Engineering Ltd. IPO?
Ans. The minimum size of the application will be one lot.
