(This is a public announcement for information purposes only and is not a Prospectus announcement) (This does not constitute an invitation or offer to acquire, purchase or subscribe for securities. Not for publication or distribution, directly or indirectly outside India.)

KRN HEAT EXCHANGER AND REFRIGERATION LIMITED

Our Company was incorporated m Bhiwadi. Alwar as KRN HEAT EXCHANGER AND REFRIGERATION PRIVATE LIMITED, a private limited company under tie Companies Act. 2013. pursuant to a certificate of incorporation dated August 25.2017. issued by Central Registration Centre. Manesar. Thereafter, our Company was converted from a private limited company to a public limited company, pursuant to a resolution passed in toe extraordinary general meeting of our Shareholders held on March 17.2023. and consequently, the name of our Company was changed to "KRN HEAT EXCHANGER AND REFRIGERATION LIMITED by deletion of tie word Private'. Afresh certificate of incorporation consequent upon conversion from private company to pubfcc company dated Apri 03,2023. was issued by tie Registrar of Companies, Jaipur, Rajasthan to our Company bearing Corporate Identification Number U29309RJ2017PLC058905. For details of n corporation, change of name and registered office of our company, please refer to chapter titled History and Certain Other Corporate Matters' beginning on page 239 of Prospectus ("Prospectus") dated September 27.2024 filed with the ROC.

Our Company has filed the Prospectus dated September 27,2024 with the RoC and the Equity Shares (as defined below) are proposed to be listed on the Main Board of National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE" and together with BSE, the "Stock Exchanges") and the trading will commence on Thursday, October 03,2024.

Please read this line "Syndicate Agreement dated August 06, 2024 entered into among our Company, the BRLM and Syndicate members" of the chapter "Material Contracts and Documents for Inspection" of our RHP and Prospectus as "Syndicate Agreement dated August 06,2024, entered into between our Company, the BRLM. the Registrar to the Issue and the Syndicate members".

Please read this line "Report titled "Detailed Prefect Report of KRN HVAC Products Limited" dated August 20,2024 prepared and issued by Q-Serv Consultants Private Limited and verified by M/s Keyur Shah & Co, Chartered Accountant", of the chapter "Material Contracts and Documents for Inspection" of our RHP and Prospectus as "Report titled "Detailed Project Report of KRN HVAC Products Private Limited" dated August 20,2024 prepared and issued by Q-Serv Consultants Private Limited and verified by M/'s Keyur Shah & Co., Chartered Accountant".

Please read the number of shareholders of promoters and promoter group "4" in the chapter titled "Capital Structure" of the prospectus as "5".

INITIAL PUBLIC ISSUE OF 1,55,43,000 EQUITY SHARES OF FACE VALUE OF Rs. 10/- EACH ("EQUITY SHARES") OF KRN H EAT EXCHANGER AND REFRIGERATION LIMITED ("COMPANY") FOR CASH AT A PRICE OF Rs. 220A PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF Rs. 210/- PER EQUITY SHARE), AGGREGATING TO Rs. 34,194.60 LAKHS (‘THE ISSUE"). THE ISSUE WILL CONSTITUTE 25.00% OF THE POST ISSUE PAID UP EQUITY SHARE CAPITAL OF OUR COMPANY.

The Issue is being made through the Book Building Process in accordance with Regulation 6(1) of the SEBIICDR Regulations.

QIB Portion: Not More Than 50% of the Issue | Retail Portion: Not Less Than 35% of the Issue | Non-lnstitutional Investor Portion: Not less than 15% of the Issue

DETAILS OF PRE-IPO PLACEMENT

Our Company, in consiitation with the BRLM, has undertaken a Pre-IPO Placement of 4.77,000 Equity Shares aggregatng to Rs. 954 Lakhs (Pre-IPO Placement"). The proceeds of tie Pre-IPO Placement shalbeutiized towards General Corporate purposes and tie fresh issue size disclosed in the Draft Red Herring Prospectus ts reduced by 4.57,000 equity shares, subject to complance wifi Rule 19(2){b) of the SCRR.

(Amount in Lakhs)

(Rs. in Lakhs)

Delay or Cancellation of orders by any one or all of our top customers could have a material and adverse effect on our business, results of operations and financial condition.

4. Dependency on limited suppliers: We rely on limited number of suppliers and procure 14.94%, 17.29% and 17.46% of our raw materials for the Financial Year 2024, 2023 and 2022 from our largest supplier and further we procure 57.73%, 57.98% and 52.38% of our raw materials from our Top 5 suppliers and 77.99%, 78.48% and 70.07% of our raw material from our top 10 key suppliers for the Financial Year 2024,2023 and 2022 respectively.

The contribution to the raw material purchase of our Company by our top ten, top five and the largest supplier is as set out below:

(Rs. in Lakhs)

Any delay in the supply of our raw materials by these suppliers may adversely affect the results of operations and financial condition.

5. Credit Risk: Our inability to collect receivables from our customers or default in payment by them could result in the reduction of our profits and affect our cash flows. In the period ended on Financial Year 2024, 2023, and 2022, our trade receivables were 7 5244.41 Lakhs, 7 3,865.83 Lakhs and 7 2979.02 Lakhs respectively, which represented 17.01%, 15.62% and 19.08% of our Revenues from Operations for such periods, respectively. An increase in bad debts or defaults may compel us to utilize greater amounts of our operating working capital and result in increased financing costs, thereby adversely affecting our results of operations and cash flows.

6. Risk of Holding High Inventory: Our inventory holding is 7 8,440.52, 7 5,508.43 and 7 2,130.85 for the Financial Year ended on March 31.2024,2023 and 2022 which tantamount to 37.02%, 29.99% and 16.42% of our Cost of Goods Sold.

The details of the inventories during past 3 Financial Years ended on March 31,2024,2023 and 2022 are as under:

(Rs. in Lakhs)

The inventory levels have increased substantially, reflecting both an overestimation of demand and potential inefficiencies in production planning. Such continuous increase has led to sub optimal utilization of resources. If we fail to manage the Inventory and forecast the demand our business operations and financial conditions maybe adversely affected.

7. Dependency on overseas Vendors for supply of raw materials: We rely heavily for our raw materials from our vendors in Malaysia. South Korea. Thailand, Vietnam and China and in Financial Year 2024, 2023 and 2022, our import purchases accounted for 78.17%, 79.08% and 72.16% of our total raw materials purchased. The details of Raw material imports from top 5 jurisdictions for the Financial Year ended on March 31,2024, 2023 and 2022 is as under:

(Rs. in Lakhs)

Any country-related risk or any change in Government policies in relation to import of goods or import of goods from any specific country or region may adversely affect the sourcing of our raw materials which may have an adverse effect on our business, operations and financial condition.

8. Risk of no long-term agreements or contracts with customers and suppliers: We do not have any long-term agreements with any of our customers and suppliers. We primarily follow a business-to-business (B2B) model that relies on purchase orders rather than long-term contracts with our customers. If our customers choose not to source their requirements from us, it would lead to financial instability and operational uncertainty and our business and financial conditions may be adversely affected.

Further we are heavily dependent on overseas suppliers to ensure quality supplies to us as per our quality specifications. Without long-term contracts with suppliers, we maybe exposed to price volatility and supply chain uncertainties, which could affect our ability to meet customer demand effectively and have an adverse effect on our business, results of operations and financial condition.

9. Geographical Risk: A major part of our total revenue from operations is generated from the State of Rajasthan which accounts for 41.24%, 43.79% and 49.19% respectively, of our total revenue from operations for the Financial Year ended on March 31,2024,2023 and 2022. The following table sets forth our revenue from operations from Rajasthan in the periods indicated:

(Rs. in Lakhs)

Any adverse developments affecting ouroperations in such region, could have an adverse impact on our business, financial condition, results of operations and cash flows.

10. Limited Operating History: Our Company has a limited operating history, which will make it difficult for the investors to evaluate our historical performance or future prospects. Our Company was incorporated on August 25,2017, and commenced its operations in June 2018. Due to this short period of operations, there is limited historical data available for evaluation, which increases the uncertainty regarding our business model, strategies, and potential for future success.

11. Utilization of IPO proceeds risk: Our Objects to issue is to make Investment in wholly owned subsidiary, incorporated on April 07,2023 in the form of equity for setting up a manufacturing unit located at SP1-24, Kolila Joga, Neemrana, Alwar, Rajasthan-301705 which is subject to the risk of unanticipated delays in implementation, cost overruns and certain Government approvals and licenses. If we are unable to implement the expansion plansatthe planned cost or time or unable to obtain Government approvalsand licenses, it could materially and adversely impact our business, results of operations and financial condition.

12. Working capital risk: We have significant working capital requirements which are funded through bank secured borrowings for the Financial Years 2024,2023 and 2022. Most of the working capital is funded as secured borrowings by bank loans. Such financing could cause our debt-to-equity ratio to increase. The Debt-to-Equity Ratio of our Company is 0 45,0.62 and 0.87 for the Financial Year ended on March 31, 2024, March 31, 2023 and March 31, 2022. If we are unable to secure adequate bank borrowings forworking capital on commercially reason able terms it could have a material adverse effect on our business, financial condition, and results of operations.

13. Competition Risk: Our Company operates in a highly competitive HVAC industry, facing numerous international players and well- established domestic companies such as Prijai Heat Exchangers Private Limited, Spirotech Heat Exchangers Private Limited. Alfa Laval India Private Ltd. REX Heat Exchanger Private Limited. Danfoss Power Solutions India Private Ltd, Kelvion India Private Ltd. as per report titled "Industiy Assessment: Indian Heat Exchanger Industry" dated August 12,2024 ("D&B Report") exclusively commissioned and paid only for the purposes of the Issue. This intense competition presents significant risks to our business operations and financial performance. The industry is characterized by several key competitive factors, including product quality, technical expertise, performance track record, client and vendor relationships, utilization of advanced machinery, timely delivery, and overall reliability.

14. Dependency on Single Industry: We are highly dependent on the HVAC industry and any unfavorable effect on HVAC industiy will adversely affect our revenue generation and future growth possibilities. Our financial performance is significantly influenced by the demand and market conditions within the Heating. Ventilation, and Air Conditioning (HVAC) industry. Our revenue is derived from products and services associated with this sector. Consequently, any downturn in the HVAC industry—whether due to economic conditions, shifts in consumer preferences, technological advancements, regulatoiy changes, or increased competition—could adversely impact our sales and profitability.

15. Regulatory Risk: We are required to obtain, renew or maintain certain statutory and regulatory permits and approvals required to operate our business and if we fail to do so in a timely manner or at all and our business, financial conditions, results of operations and cash flows may be adversely affected.

16. Litigation Risk: Our Company, its Promoters and our Directors are party to certain legal proceedings. Any adverse outcome in such proceedings may have an adverse impact on our reputation, business, financial condition, results of operations and cash flows.

17. The Weighted Average Cost of Acquisition of all Equity Shares transacted in 1 year, 18 months and in last 3 years preceding the date of the Prospectus:

*As certified by the Statutory Auditor, pursuant to the certificate dated September 12.2024.

Note: Our Company, in consultation with the BRLM, has undertaken a Pre-IPO Placement of 4,77,000 Equity Shares aggregating to 7 954 Lakhs ("Pre-IPO Placement"). The proceeds of the Pre-IPO Placement shall be utilized towards General Corporate purposes and the fresh issue size disclosed in the Prospectus is reduced by 4,77,000 equity shares, subject to compliance with Rule 19(2)(b) of the SCRR. The Pre-IPO Placement has not exceeded 20% of the size of the Fresh Issue.

20. Weighted Average Cost of Acquisition compared to Floor Price and Cap Price:

*As certified by the Statutory Auditor, pursuant to the certificate dated September 12,2024.

22. The BRLM associated with the Issue have handled Nine public issues in the past three Financial Years.

THE EQUITY SHARES OF OUR COMPANY WILL GET LISTED ON MAIN BOARD PLATFORM OF BSE AND NSE.

The Issue is being made through the Book Building Process, in terms of Rule 19(2)(b)(l) of the Securities Contracts (Regulation) Rules, 1957, as amended ("SCRR") read with Regulation 31 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (SEBIICDR Regulations) and in compliance with Regulation 6(1) of the SEBIICDR Regulations wherein not more than 50% of the Net Issue shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (QIBs and such portion, the "QIB Portion'), provided that our Company in consultation with the BRLM, may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis ("Anchor Investor Portion"), out of which one-third shall be reserved for domestic Mutual Funds only, subjectto valid Bids being received from domestic Mutual Funds at or above the price at which allocation is made to Anchor Investors ("Anchor Investor Allocation Price"), in accordance with the SEBI ICDR Regulations. In the event of under-subscription, or non-allocation in the Anchor Investor Portion, the balance Equity Shares shall be added to the QIB Portion (excluding the Anchor Investor Portion) ("Net QIB Portion"). Further, 5% of the Net QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the Net QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subjectto valid Bids being received from them at or above the Issue Price. However, if the aggregate demand from Mutual Funds is less than 5% of the Net QIB Portion, the balance Equity Shares available for allocation in the Mutual Fund Portion will be added to the remaining Net QIB Portion for proportionate allocation to QIBs.

Further, not less than 15% of the Net Issue shall be available for allocation to Non-Institutional Bidders and not less than 35% of the Net Issue shall be available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being received from them at or above the Issue Price. The Equity Shares available for allocation to Non-Institutional Bidders under the Non-Institutional Portion, shall be subject to the following: (i) one-third of the portion available to Non-Institutional Bidders shall be reserved for applicants with an application size of more than Rs. 2.00 Lakhs and up to Rs.10.00 Lakhs, and (ii) two-third of the portion available to Non-1 nstitutional Bidders shall be reserved for applicants with an application size of more than Rs. 10.00 Lakhs, provided that the unsubscribed portion in either of the aforementioned sub-categories may be allocated to applicants in the other sub-category of Non-I nstitutional Bidders. All potential Bidders (except Anchor Investors) are mandatority required to utilise the Application Supported by Blocked Amount ("ASBA") process by providing details of their respective ASBA accounts and UPI ID in case of UPI Bidders using the UPI Mechanism, as applicable, pursuant to which their corresponding Bid Amount will be blocked by the Self Certified Syndicate Banks ("SCSBs") or by the Sponsor Banks under the UPI Mechanism, as the case may be, to the extent of the respective Bid Amounts. Anchor Investors are not permitted to participate in the Issue through the ASBA Process. For details, see Issue Procedure' on page 413 of the Prospectus.

The bidding period for Anchor Investors opened and closed on Tuesday, September 24,2024. The Company received 10Anchor Investor Applications for 54,54,980 Equity Shares. The Anchor Investor Allocation Price was finalized at Rs. 220.00 per Equity Share. A total of 45,50,000 Equity Shares were allocated under the Anchor Investor Portion, aggregating to Rs. 1,00,10,00,000/-.

The Issue has received 6921354 applications for 2452698625 Equity shares (Before Technical Rejections, Multiple Rejections, bids not banked and invalid duplicate / Multiple bids) excluding Anchor Investor Application. The Issue was subscribed to the extent of 223.11 times (excluding Anchor investor portion) as per the application data (Before Technical Rejections, Multiple Rejections, bids not banked and after removing invalid duplicate / Multiple bids). After considering the technical rejections cases, the issue was subscribed 211.95 times (excluding Anchor investor portion).

The details of the applications received in the Issue from various categories are as under (before rejections):

Final Demand

A summary of tie final demand as per NSE and BSE as on tie Bid'lssue Closing Date at different Bid pnces is as under:

Basis of Allotment was finalized in consitation witi the Designated Stock Exchange, beang BSE Limited on September 30. 2024.

A. Allocation to Retail Individual Investors (After Rejections) (including ASBAApplications):

The Bass of Allotment to Ihe Retai Individual Investors, who have Bid at cut-off price of 7 220'- per Equity Share, was finalized in consultation witi BSE Limited. The Category was subscribed to the extent of 9526 f mes. The Total number of Equity Shares alotled in this category ts 5498330 Equity Shares to 845B8 successfd appfccants. The category-wtse details of tie Basts of Alotment are as under:

B. Allotment to Non-lnstitutional Investors (More than Rs.200,00( and up to 71.000,000) after rejections)

The Basis of Allotment to Non-lnstitutional Investors {more than Rs. 2 lakhs and up to Rs. 10 lakhs), who have Bid at or above the Issue Price of Rs. 220'- per Equity Share was finalised in consultation with BSE Limited. The Category has been subscribed to the extent of 398.91 times. The Total number of Equity Shares allotted in the category is 795738 Equity Shares to 874 successful applicants. The category-wise details of the Basis of Allotment are as under (Sample)

C. Allotment to Non-lnstitutional Investors {More than Rs. 1,000,000)

The Basis of Allotment to Nan-institutional Investors {more tian Rs. 10 lakhs. Who have Bid at or above tie Issue Price of Rs. 220/- per Equly Share was finalised In cansulation with BSE Limited. The Category has been subscribed to the extent of 442.73 Imes. The Told number of Eqiity Shares dlotted in tits category s 15914 7 7 Equity Sha-es to 1748 successful applcants. The calegory-vese detalsof tie Bass of Alolmentare as under: {Sample):

D. Allotment to QIBs (Excluding Anchor Investors} (alter rejections)

Allotment*) QBs. Atio have bid a! tie Issue Pnce Rs. 220!- haw been done an a proportanate bass in consultatan Ait) BSE limited. Ths Category has been subsaibed to tie extent of 263.71 fmes of Nrt Q8 Porlan. The Total number of Equty Shares dirtied n ths category is 2952040 Equity Shares to 176 successful applicants. The categary-Aise details of tie Bass of AloSment a-e asunder:

E. Allotment to Anchor Investors

The Company, in cons lit at on with tie BRIM ha\e been alocaled 45.50.000 Equity Shares to 9 Anchor Investors at an Anchor Investor Issue Pnce of Rs. 220/- per Equity Shares inaccordance witi SEBIICDR Regulators. This represent 59.425-b of IheQIB Portion.

The Board of Directors of the Company at its meettog held on September 30.2024 has taken on record the Basis of Alolmentof Equity Shares approved by the Designated Stock Exchange viz. BSE Limited and has alotted tie Equity Shares to various successU applicants. The ABotment Advice cum refund intonation and/or notices wi be dispatched to tie address of the Applicants as registered with tie depositories. Further, the ns true to ns to SCSBs have been dispatched / maied for unbiodung of funds and transfer to the pubic issue account on or before October 01, 2024. In case the same is not received wittwi ten days. Investors may contact the Registar to the Issue at the address gi\enbeicw. The Equity Shares a located to successU allottees shal be uploaded on or before October 01, 2024 for credit into tie respectne beneficiary accounts subject to validation of the account detais with the depositories concerned. The Company has fted the Listing application with NSE and BSE on October 01, 2024. The Company has received the Ssfcigand trading approval from NSE and BSE and trading wi commence on October 03, 2024.

Note:AI capitalized terms used and not defined here*i shal have the respective mearwig assigned to them in tie Prospectus dated September 27,2024 ("Prospect us") filed witi the Registrar of Companies. Jaipur ("RoC).

The detais of the alolment made has been hosted on tie website of the Registrar to the Issue. Big share Services Private Limited at website: www.bigshareonSne.com.

Al foture correspondence in this regard may kixfy be addressed to the Registar to the Issue quotiig fiJ name of tie FirsfSole Bidder Serial number of the ASBA Form, number of Equity Shares bod for. Bidder DP ID. CSent ID. FAN. date of submission of tie Bid cum Application Form, address of the Bidder, the name and address of the Designated Intermediary where tie Bid cum Applicaton Form was submitted by tie Bidder and copy of the acknowledgement sip recenedfrom the Designated Intermediary and payment details at the address ghen beict/t:

BIGSHARE SERVICES PRIVATE LIMITED

Office No. S6-2. 6th Floor. PinnacJe Busness Park. Next to Ahura Center

Mahakali Caves Road, Andheri (East). Mumbai - 400093

Tel: +91 22-6263 8200. Fax: +9 1 22-6263 8299. Website: www.bigshareonfine.com

Email: ipo@bjgshareonlne.com. Investor Grievance ID: investor@bigshareonine.com

Contact Person: Mr. Babu Rapheal C.

SEBI Registration Number: INR000001385

Disclaimer: KRN Heat Exchanger and Refrigeration Urn fed is proposing, subject to applicable statutory and regiiatory requirements, receipt of requsfe approvals, market conektons and other considerations, to make an Initial Pubic Issue of its Equty Shares and has filed tie Prospectus wifi tie RoC. The Prospectus will be avaliable on tie websites of SEBI at www.sebi.gov.in, BSE Ltd at www.hsesncka.com and Stock Exchange of Incka Limited at www.nseiicka.com respectively and is avalable on tie websites of Hoiarx Constants Pnvate Limited a t www.holaniconsultants.co.in. The potential investors should note that nvestmentineqiity shares involves a high degree of nsk and for detads relatng to fie same, refer to the Section tied "Risk Factors" on page 33 of the Pros pec tos. Potental investors should not rely on fie DRHP filed with SEBI for making any investment deciswn and instead shocid place reliance on the RHP. The Equty Shares have not been and wi not be registered under tie United States Securities Act of 1933. as amended ("U.S. Securrtes Act"), and may not be issued or sold witwi the United States except pusuant to an exemption from, or in a fansacton not subject to. the registration requirements of tie U.S. Securrtes Act and applicable U.S. state securities laws. Accor ckngfy. tie Equity Shares are besng issued and sold outside the United States in offshore tans actons inreiance on Regiiaton inderthe U.S. Securrtes Act and applicable Iaws of the jutsckdions where such issues and sales occir. There wi be no pubic tssung in tie United States.