JK Files & Engineering IPO

JK Files & Engineering Limited was the world ‘s second biggest steel file supplier, with a market share of 10% to 12% of total sales volume In 2020. JK Files & Engineering IPO will hit the market in March 2021.

About JK Files & Engineering

They manufacture, sell, and distribute precision engineered elements for tools and hardware such as steel files and drills, as well as marketing, selling, and distributing hand tools, power tool items, and power tool devices, and manufacturing, selling, and distributing auto components and engineering products including ring gears, flexplates, and water pump bearings via their subsidiary, RPAL.

In 2020, it was the world’s second largest provider of steel files, with a market share of 10% to 12% of total sales volume.

In Fiscal 2021, their company is also the market leader in India’s files category, with a market share of 64 percent -66 percent by sales volume.

Market Share

With a market share of 50 percent to 55 percent by volume in steel files, they are the most popular brand in Africa. Furthermore, they are a market leader in the drills area in India, with a market share of 8% to 10% in terms of value.

In terms of supply to original equipment manufacturers for domestic production, RPAL have the highest volume share of 52 percent to 56 percent in the domestic passenger vehicle industry and 46 percent to 50 percent in the commercial vehicle industry, and is one of the key players in the ring gears industry globally.

They are India’s only domestic flexplate manufacturer, and they are expected to meet 25% to 27% of the flexplate volume requirement for PV domestic production.

Customer Base

They have a strong client emphasis, and their client base includes both business-to-business (“B2B”) and business-to-consumer (“B2C”) clients in more than 60 nations throughout Asia-Pacific, Africa, Latin America, Europe, and North America as of June 30, 2021.

• B2B Business

They manufacture and supply to a number of worldwide file and drill firms, as well as OEMs and Tier-1 suppliers (who are generally controlled by OEMs), and provide endtoend production solutions for file manufacturing.

They’ve also built long-term partnerships with a number of customers. In Fiscal 2021 and the three months ended June 30, 2021, their B2B business accounted for 52.15 percent and 58.11 percent of pro forma total product sales, respectively.

• B2C Business

As of June 30, 2021, their tools and hardware business had a well-established network of over 730 active distributors in India, serving over 600 towns and over 150,000 retail outlets, and also over 135 active distributors in international countries.

They ‘ve also built long-term ties with a number of wholesalers. In Fiscal 2021 and the 3 months ended June 30, 2021, their B2C business accounted for 47.85 percent and 41.89 percent of pro forma total product sales, correspondingly.

JK Files & Engineering IPO

JK Files & Engineering Limited, headquartered in Mumbai has submitted Draft Red Herring Prospectus(DRHP) to Securities and Exchange Board of India(SEBI) for initial public offering (IPO) of INR 800 crores on 08 December 2021.

The offer doesn’t includes any fresh issue and there is offer for sale (OFS) of 800 crores value equity shares by the promoters mentioned in the DRHP. They are not looking for any pre-IPO placement in this issue.

They are now waiting for approval from Securities and Exchange Board of India(SEBI) to float the initial public offering (IPO) in the market.

Financials Trends

Particulars	For the year/period ended ( in Cr.)
	30-Jun-21	31-Mar-21	31-Mar-20	31-Mar-19
Total Assets	256.76	240.97	236.73	220.87
Total Revenue	111.88	349.66	382.05	403.80
Profit After Tax	9.57	23.87	14.62	17.35

Basic and Diluted Earnings Per Share

Financial Period	Basic EPS (in INR)	Diluted EPS (in INR)	Weight
Financial Year 2021	4.85	4.13	3
Financial Year 2020	2.68	2.28	2
Financial Year 2019	3.16	2.69	1
Weighted Average	3.85	3.27
30 Sep. 2021	1.83	1.56

Objects of the Issue

• Prepayment / repayment of all or a portion of the outstanding borrowings of the company to be availed on consolidated basis.
• To meet common corporate objectives.

Basis of the offer

The following are among the qualitative elements that go into determining the Offer Price:

1. Position of leadership in the field of precision engineered and automotive components that are both complex and high-quality.
2. A diverse product portfolio with applications in a variety of end-markets and sectors.
3. De-risked business strategy with geographic, customer, and end-segment diversification.
4. Long-standing ties with distributors and major local and international OEMs.
5. backed up by a large distribution network
6. Continuous production is the outcome of strong engineering capabilities combined with strategically situated manufacturing facilities.
7. Product development and cost-cutting measures are both important.
8. Solid financial results.
9. The Raymond group has a strong lineage and an experienced top management team.

JK Files & Engineering IPO Peer Comparison

S. No.	Face Value	Company Name	PE
1	10	Rolex Rings Limited	31.02
2	2	Sansera Engineering Limited	37.28
3	5	Craftsman Automation Limited	47.56
4	2	NRB Bearings Limited	30.04
5	10	Timken India Limited	106.00
6	10	SKF India Limited	64.63

Note:

1. The closing price of these equity shares on December 03, 2021 from the BSE portal.
2. All financial data for listed industry peers is consolidated (unless otherwise stated) and derived from the respective firm’s annual results/reports for the fiscal year ended March 31, 2021.c

JK Files & Engineering IPO Details

IPO Opening Date	March 2021
IPO Closing Date	March 2021
Issue Type	Book Building
Face Value	2 per share
IPO Price	0 to 0 per equity share
Market Lot	–
Min Amount	–
Listing At	BSE, NSE
Issue Size	–
Fresh Issue	200 Crores
Offer for Sale	8,510,638 equity share

JK Files & Engineering IPO Date

JK Files & Engineering IPO opening date is March 2021, and the closing date is March 2021. The JK Files & Engineering issue may list in March 2021.

IPO Opening Date	March 2021
IPO Closing Date	March 2021
Basis of Allotment Date	March 2021
Initiation of Refunds	March 2021
Credit of Shares to Demat Account	March 2021
IPO Listing Date	March 2021

Basis of Allotment

Type	% of Offer	Basis of Allotment
Qualified Institutional Buyer	50	Roughly  equivalent
Non Institutional Investor	15	Roughly  equivalent
Retail	35	Minimum level of 1 lot, based on availability, for every shareholder.

JK Files & Engineering IPO Allotment Status

Allotment of equity stocks subject to the Fresh Issue and transfer of the Promoter Selling Shareholders’ OFS Stocks to the winning Bidders subject to the Offer for Sale. Nevertheless, the status of the allotment has yet to be revealed.

Here, you can find the Allotment Status of JK Files & Engineering IPO.

JK Files & Engineering IPO GMP

JK Files & Engineering IPO Grey Market Premium is 0. You can check out GMP of Other IPOs on below Links:

Date	GMP (in Rs)	Subject to Sauda	Kostak (in Rs)
March 2021
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March 2021
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Check Out the GMP of all Other IPOs

IPO Grey Market Premium

JK Files & Engineering IPO Review

JK Files & Engineering IPO review will depend on the price band which will be announced after SEBI approval. Whenever it will be announced we will update you regarding review of JK Files & Engineering IPO is good or bad.

JK Files & Engineering IPO Risk

• They rely on the sale of their products to a few important clients to stay afloat.
• The sale of their products via distribution networks in India and around the world is critical to their tools and hardware company.
• The COVID-19 pandemic’s influence on their business and operations is still unknown.
• Their businesses are reliant on the success of a specific end-segment.
• For the delivery of raw materials, they rely on third parties with whom they do not have long-term supply contracts.
• Their primary items, namely files and ring gears, account up a significant portion of overall sales.
• The Mumbai Bench of the NCLT has withdrawn a plan of solution involving one of their subsidiaries, SEPL.

Other Threats

• Their consumers do not have any long-term commitment agreements with them.
• Their business relies on their production facilities, and their manufacturing method exposes them to certain hazards.
• Their Company, Directors, Promoter, Group Companies, and Subsidiaries are all involved in ongoing legal processes. Any negative outcome of these proceedings could have a negative impact on their business.
• To conduct their business, they must obtain, renew, or maintain statutory and regulatory licences, licences, and approvals.
• Considering their export sales and a large percentage of their expenditures are denominated in foreign currencies, exchange rate movements may have a negative impact on their results of operations.

JK Files & Engineering IPO Brokerage views

• Yes Securities : Not Updated
• Choice Brokering: Not Updated
• Axis Securities: Not Updated
• IIFL Securities: Not Updated
• Trade swift: Not Updated
• Anand Rathi : Not Updated
• ICICI Securities: Not Updated

JK Files & Engineering IPO Subscription Status

Date	Day	QIB	NII	Retail	Employees	Total Subscription
March 2021	1
March 2021	2
March 2021	3

Management

They are led by a seasoned management team with the knowledge and vision to effectively manage and expand both of their companies.

Balasubramanian Vishwanathan, their Company’s Managing Director, has 35 years of expertise and formerly worked as a Whole-Time Director in RPAL, and Hukumchand Lakhotiya, their Company’s Chief Executive Officer, has 25 years of expertise.

Their senior management team also includes seasoned and trained experts with extensive industry knowledge and expertise.

Their senior management team contributes to their overall strategic planning and company development, as well as their revenue and administrative success.

Raymond Group

Raymond Limited, the flagship firm of ‘The Raymond group,’ is their parent company. The Raymond company has a 95-year history and a long and profitable track record (Source: CRISIL Report).

Raymond Limited is a diversified and market-leading company having interests in the textile and garment industries, and a foothold in local and global markets in real estate, fast-moving consumer products, and engineering.

Promoters

• Raymond Limited

Promoters’s Holding

Pre Issue Share Holding	100%
Post Issue Share Holding

JK Files & Engineering IPO Prospectus