JNK India IPO Basis of Allotment

JNK INDIA LIMITED

Our Company was incorporated as' JNK India Private Limited', a private limited company under the Companies Act. 1956 in Thane. Maharashtra, pursuant to a certificate of incorporation dated June 14, 2010. granted by the Registrar of Companies. Maharashtra at Mumbai ("RoC'). Pursuant to the conversion of our Company from a private limited company into a public limited company and as approved by our Board on April 12, 2023, and a special resolution passed by oor Shareholders at the EGM on April 14, 2023. the name of our Company was changed to' JNK India Limited', and the RoC issued a fresh certificate of incorporation on May 26, 2023. For details of change in the Registered Office, see "History and Certain Corporate Matters - Changes in the Registered Office "on page 205 of the Prospectus dated April 25, 2024 filed with the RoC ("Prospectus").

Our Company has filed the Prospectus dated April 25,2024 with the RoC, and the Equity Shares (as defined below) are proposed to be listed on the National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE") and trading shall commence on April 30,2024.

INITIAL PUBLIC OFFERING OF 15,649,967 EQUITY SHARES OF FACE VALUE OFRs. 2 EACH ("EQUITY SHARES") OF JNK INDIA LIMITED ("OUR COMPANY" OR THE "ISSUER") FOR CASH AT A PRICE OF RS. 415 PER EQUITY SHARES (INCLUDING A SHARE PREMIUM OF Rs. 413 PER EQUITY SHARE) (THE "OFFER PRICE") AGGREGATING TO Rs. 6,494.74 MILLION (THE "OFFER"), COMPRISING A FRESH ISSUE OF 7,228,915 EQUITY SHARES AGGREGATING TO Rs. 3,000.00 MILLION ("FRESH ISSUE") AND AN OFFER FOR SALE OF 8,421,052 EQUITY SHARES (THE "OFFERED SHARES") AGGREGATING TO Rs. 3,494.74 MILLION (THE "OFFER FOR SALE"), COMPRISING 1,122,807 EQUITY SHARES BY GOUTAM RAMPELLI AGGREGATING TO Rs. 465.96 MILLION, 2,432,749 EQUITY SHARES BY JNK GLOBAL CO. LTD (FORMALLY KNOWN AS JNK HEATERS CO. LTD) ("JNK GLOBAL") AGGREGATING TO RS. 1,009.59 MILLION AND 4,397,661 EQUITY SHARES BY MASCOT CAPITAL AND MARKETING PRIVATE LIMITED ("MASCOT CAPITAL") AGGREGATING TO Rs. 1,825.00 MILLION (THE "PROMOTER SELLING SHAREHOLDERS ") AND 467,835 EQUITY SHARES AGGREGATING TO Rs. 194.15 MILLION BY MILIND JOSHI ("INDIVIDUAL SELLING SHAREHOLDER", COLLECTIVELY, THE "SELLING SHAREHOLDERS"). THE OFFER WILL CONSTITUTE 28.14% OF OUR POST- OFFER PAID-UP EQUITY SHARE CAPITAL.

1. Significant portion of revenue from Contracting Customers: We have derived 54.63%, 72.53%, 74.71% and 66.72% of our revenue from operations from orders which are contracted to us by Contracting Customers for the nine months ended December 31,2023, Fiscals 2023,2022 and 2021, respectively. In the event we are unable to obtain new projects from Contracting customers, our revenue from operations, cash flows and financial conditions will be materially and adversely affected.

2. Risk associated with New Order Book: Our Company has received 5 orders, 12 orders, 9 orders and 11 orders of Rs. 2,265.47 million, Rs. 7,712.74 million, Rs. 6,284.95 million and Rs. 2,114.52 million, respectively, for nine months ended December 31, 2023, Fiscals 2023, 2022, 2021, respectively. The number of orders we have received in the past, our existing Order Book and our growth rate may not be indicative of the number of orders we will receive in future. The order wins and any delays in execution of our orders expose us to time and cost overruns and variability in revenue, materially and adversely impacting our revenue from operations, cash flows and financial conditions.

3. Dependence on our Corporate Promoter. JNK Global Co. Ltd, (formerly known as JNKHeaters Co. LtdJ: Our revenue share from projects awarded to us by or with support of our Corporate Promoter, JNK Global Co., Ltd., (formerly known as JNK Heaters Co. Ltd.) contributed 27.08%, 54.39%, 73.85% and 54.53% of our total revenue for the nine months ended December 31, 2023, Fiscals 2023,2022 and 2021, respectively. Further, we use the logo and trademark of one of our Corporate Promoter, JNK Global Co. Limited (formerly known as JNK Heaters Co. Ltd.), as per the Co-operation Agreement dated May 17,2023, and do not have any trademark or logo registered in our name. Any kind of disassociation or default on contractual obligations or termination of contract could have an adverse impact on our business, results of operations and cash flows.

4. Raw materials related risk: We do not enter into any long-term contracts with our suppliers and have incurred 49.79%, 40.29%, 37.32% and 22.01% of our total expenses towards cost of goods used for the nine months ended December 31, 2023, Fiscals 2023, 2022 and 2021, respectively. Any variation in the agreed terms of the orders or contracts would create an adverse impact on our business. The loss of any of our existing suppliers as a result of termination of existing contracts, may adversely affect our flow of operations.

5. Industry related risk: Our business is heavily dependent on the capital expenditure of oil and gas refineries, petrochemical and fertilizers industries as they are the primary Customers for Heating Equipment. Any fluctuations in the oil and gas prices, whether in India or overseas, would create an impact on the capital expenditure plans of oil and gas refineries, petrochemical and fertilizers industries. Any downside in the capital expenditure of oil and gas, petrochemical and fertilizers industry would create an adverse impact on our revenue from operations, cash flows and financial conditions.

6. Dependence on Heating Equipment: Our product portfolio is categorised into two segments (a) Heating Equipment; and (b) Flares and incinerators and others. We have derived 92.82%, 82.49%, 88.13% and 88.29% of our revenue from operations for the nine months ended December 31, 2023, Fiscals 2023, 2022 and 2021, from sales of Heating Equipment. Loss or decline in the demand of such Heating Equipment may result in an adverse effect on our business, revenue from operations and financial condition.

7. High working capital requirement: Our Company has a high working capital requirement and working capital projections made by our Company are based on our management's assumptions. On a standalone basis, our net working capital turnover ratio was 1.50, 3.02, 11.65 and 3.14 as on nine months ended December 31,2023 and as on March 31,2023, March 31, 2022 and March 31, 2021, respectively. Our inability to meet our present working capital requirements or our enhanced working capital requirements will have an adverse impact on our results of operation, business and financial condition. Further, we intend to use Rs. 2,626.90 million towards funding working capital requirements of our Company, from the proceeds of the Offer.

8. We are unable to trace some of the historical records and there have been certain instances of regulatory non-compliances in the past which may subject us to regulatory actions and penalties.

9. Our Company will not receive any proceeds from the Offer for Sale. The Selling Shareholders shall be entitled to proceeds from the Offer for Sale.

10. The Price/ Earnings ratio based on diluted EPS for Fiscal 2023 for our Company at the upper end of the price band is as high as 41.54 as compared to the Nifty Fifty P/E Ratio (as on April 5, 2024) of 23.07.

11. Highest average cost of acquisition of Equity Shares for the Selling Shareholders in the Offer is Rs.4.38, and Offer Price at the upper end of the price band is Rs.415.

12. The weighted average return on net worth for our Company for Fiscal 2021, Fiscal 2022 and Fiscal 2023 is 55.36%.

13. Details of Weighted average cost of acquisition ("WACA") of all Equity Shares transacted in last three years, eighteen months and one year immediately preceding the date of the RHP.

As certified by Statutory Auditor, (having FRN No.101745W) by way of certificate dated April 25,2024.

Excludes Equity Shares issued pursuant to bonus issuance

14. Weighted average cost of acquisition compared to Floor Price and Cap Price:

As certified by Statutory Auditor, (having FRN No. 101745W) by their certificate dated April 17,2024 15. Two BRLMs associated with the Offer have handled 56 public issues in the past three years, out of which 17 issues closed below the offer price on listing date.

* Issues handled where there were no common BRLMs.

The Offer was made in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957. as amended (the *SCRR"), read with Regulation 31 of the SEBIICDR Regulations. The Offer was made through the Book Building Process in accordance with Regulation 6(1) of the SEBI ICDR Regulations wherein not more than 50% of the Offer was available for allocation on a proportionate basis to Qualified Institutional Buyers (‘QIBs") (the ‘QIB Portion'), provided that our Company in consultation with the BRLMs may allocate up to 60% of the QIB Portion to Anchor Investors and the basis of such allocation will be on a discretionary basis, in accordance with the SEBI ICDR Regulations (the ‘Anchor Investor Portion'), of which one-third was reserved for domestic Mutual Funds, subject to valid Bids being received from the domestic Mutual Funds at or above the price at which allocation is made to Anchor Investors (-Anchor Investor Allocation Price"). In the event of under-subscription or non-allocation in the Anchor Investor Portion, the balance Equity Shares were added to the QIB Portion (other than the Anchor Investor Portion) (the ‘Net Ql B Portion¹). Further. 5% of the Net QIB Portion (excluding the Anchor Investor Portion) was available for allocation on a proportionate basis to Mutual Funds only, subject to valid Bids being received at or above the Offer Price, and the remainder of the Net QIB Portion was available for allocation on a proportionate basis to all QIBs (other than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the Offer Price. Further, not less than 15% of the Offer was available for allocation to Non-lnstitutional Investors ("Non-lnstitutional Category') of which one-third of the Non-lnstitutional Category was available for allocation to Non- Institutional Category with an application size of more than Rs. 200,000 and up to Rs. 1,000.000 and two-thirds of the Non-lnstitutional Category was available for allocation to Non- lnstitutional Category with an application size of more than Rs. 1,000,000 and under-subscription in either of these two sub-categories of the Non-lnstitutional Category was allocated to Bidders in the other sub-category of the Non-lnstitutional Category in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. Further, not less than 35% of the Offer was available for allocation to Retail Individual Investors (‘Retail Category"), in accordance with the SEBI ICDR Regulations, subject to valid Bids being received from them at or above the Offer Price. AH Bidders (except Anchor Investors) shall mandatorily participate in this Offer only through the Application Supported by Blocked Amount fASBA') process and shall provide details of their respective bank account (including UPI ID (defined hereinafter) in case of UPI Bidders (defined hereinafter) in which the Bid Amount was blocked by the Self Certified Syndicate Banks {'SCSBs¹) or pursuant to the UPI Mechanism, as the case may be. Anchor Investors were not permitted to participate in the Anchor Investor Portion through the ASBA process. For details, see "Offer Procedure" on page 381 of the Prospectus

The bidding for Anchor Investor opened and closed on April 22.2024. The Company received 19 applications from 15 Anchor Investors for 55.38.924 Equity Shares. The Anchor Investor Offer Price was finalized atRs. 415 perEquity Share. Atotal of 46,94.989 Equity Shares were allocated under the Anchor Investor Portion aggregating toRs. 1.94.84,20,435.00. The Offer received 5.02.283 applications for 31.79,93,040 Equity Shares (including applications from Anchor Investors and prior to rejections considering only valid bids) resulting resulting in 20.32 fame subscription. The details of the applications received in the Offer from Retail Individual Bidders. Non-lnstitutional Bidders. QIBs and Anchor Investors are as under(before technical rejections):

Final Demand

A summary of the final demand as per N SE and BSE as on the Bid/Offer Closing Date at different Bid prices is as under:

The Basis of Allotment was finalized in consultation with the Designated Stock Exchange, being NSE on April 26,2024

A. Allotment to Retail Individual Bidders (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Retail Individual Bidders. who have bid at cut-off or at the Offer Price of 7415 per Equity, was finalized in consultation with NSE. This category has been subscribed to the extent of 4.17 times. The total number of Equity Shares Allotted in Retail Portion is 54,77,489 Equity Shares to 1,52,152 successful Retail Individual Bidders. The category-wise details of the Basis of Allotment are as under:

B. Allotment to Non-lnstitutional Bidders (more than Rs.0.20 million and upto Rs.1 million) (After Rejections) (including ASBA Applications)

The Bass of Allotment to the Non-lnstitutional Brdders (more than 10.20 million and upto Rs.1 million), who have bid at the Offer Price of 1415 per Equity Share or above, was finalized in consultation with NSE This category has been subscnbed to the extent of 15.92 times (after rejections). The total number of Equity Shares allotted in this category is 7,82.499 Equity Shares to 1.552 successful Non-lnstitutional Investors. The category-wise details of the Basis of Allotment are as under: (Sample)

C. Allotment to Non-lnstitutional Bidders (more than Rs.1 million) (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Non-lnstitutional Bidders (more than Rs.1 million), who have bid at the Offer Price of Rs.415 per Equity Share or above, was finalized in consultation with NSE. This sub-category has been subscribed to the extent of 21.92 times. The total number of Equity Shares allotted in this category is 15,64,997 Equity Shares to 3.105 successful

D. Allotment to QIBs (After Rejections)

Allotment to QIBs, who have bid at the Offer Price of Rs.415 per Equity Share or above, has been done on a proportionate basis in consultation with NSE. This category has been subscribed to the extent of 77,19 times of Net QIB portion, As per the SEBl Regulations, Mutual Funds were allotted 5% of the Equity Shares of Net QIB portion available i.e, 1.56.500 Equity Shares and other QIBs and unsatisfied demand of Mutual Funds were allotted the remaining available Equity Shares i.e. 29.73.493 Equity Shares on a proportionate basis. The total number of Equity Shares allotted m the QIB category is 31.29,993 Equity Shares, which were allotted to 110 successful QIB Investors The category- wise details of the Basis of Allotment are as under:

E. Allotment to Anchor Investors (After Rejections)

The Company, in consultation with the BRLMs. have allocated 46,94.989 Equity Shares to 15 Anchor Investors (through 19 Anchor Investor Application Forms) (including 7 domestic Mutual Funds through 11 schemes) at an Anchor Investor Offer Pnce at Rs.415 per Equity Share in accordance with SEBl ICDR Regulations. This represents 60% of the QIB portion

The Board of Directors of our Company at its meeting held on April 26,2024 has taken on record the basis of allotment of Equity Shares approved by the Designated Stock Exchange, being NSE and has allotted the Equity Shares to various successful applicants. The Allotment Advice Cum Refund Intimation and/or notices will be dispatched on April 29.2024 to the address of the investors as registered with the depositions. Further, instructions to the SCSBs have been issued for unblocking of funds and transfer to the Public Offer Account on April 26,2024 and the payments to non-syndicate brokers will be issued on April 29,2024. In case the same is not received within ten days, investors may contact the Registrar to the Offer at the address given below. The Equity Shares allotted to the successful allottees will be uploaded on April 29.2024 for credit into the respective beneficiary accounts subject to validation of the account details with the depositions concerned. The Company will file the Listing application with BSE and NSE on April 29,2024. The Company will receive the listing and trading approval from BSE & NSE, and trading will commence on April 30,2024.

Note: All capitalized terms used and not defined herein shall have the respective meanings assigned to them in the Prospectus.

INVESTORS PLEASE NOTE

These details of the Allotment made was hosted on the website of Registrar to the Offer, Link Intime India Private Limited at www.linkintime.co.in.

All future correspondence in this regard may kindly be addressed to the Registrar to the Offer quoting full name of the First/ Sole applicant. Serial number of the Bid cum Application form number, Bidders DP ID. Client ID, PAN. date of submission of Bid cum Application Form, address of the Bidder, number of Equity Shares bid for. name and of address the Designated Intermediary, where the Bid cum Application Form was submitted by the Bidder and a copy of the Acknowledgment Slip received from the Designated Intermediary at the address given below;

THE LEVEL OF SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE MARKET PRICE OF THE EQUITY SHARES ON LISTING OR THE BUSINESS PROSPECTS OF JNK INDIA LIMITED.

JNK INDIA LIMITED has filed the Prospectus dated April 25.2024 with the RoC and thereafter the Stock Exchanges. The Prospectus is made available on the website of the SEBI at www.sebi.gov.in as well as on the website of the BRLMs i.e.. IIFL Securities Limited at www.iiflcap.com and ICICI Securities Limited at www.icicisecurities.com. the website of the NSE at www.nseindia.com and the website of the BSE at www.bseindia.com and the website of the Company at www.jnkindia.com. Any potential investor should note that investment in equity shares involves a high degree of risk and for details relating to such risks, please see the section titled "Risk Factors" beginning on page 31 of the Prospectus Potential investors should not rely on the DRHP for making any investment decision but can only rely on the information included in the Red Herring Prospectus.

The Equity Shares have not been and will not be registered under the United States Securities Act of 1933. as amended ('U.S. Securities Act') or any state securities laws in the United States, and unless so registered, and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U. S. state securities laws. Accordingly, the Equity Shares are being offered and sold outside the United States in offshore transactions in reliance on Regulation S and the applicable laws of each jurisdictions where such offers and sales are made.