KRN Heat Exchanger and Refrigeration has received an order from the Deputy Commissioner of State Tax, Circle Shahjahanpur, Zone: Bhiwadi, Rajasthan, demanding tax, interest, and penalty under the Rajasthan Goods and Service Tax Act, 2017. The order, dated May 13, 2026, was received by the company on June 19, 2026. The demand pertains to alleged ineligible Input Tax Credit (ITC) for the Financial Year 2025-26, with the total financial implication exceeding ₹5.5 crore. The company has stated it will challenge the order legally, adding that there will be no material financial impact beyond the specified demand amount.

Details of the GST Demand Order

The GST Authority has passed an order for recovery covering tax, interest, and penalty components across IGST, CGST, and SGST heads. The following table summarises the demands raised:

The tax demand of ₹4,94,66,278 has been raised under Section 74A of the Rajasthan Goods and Service Tax Act, 2017. The interest component of ₹9,75,773 has been levied under Section 50 of the same Act, while the penalty of ₹49,46,627 has been imposed under Section 74A(5).

Nature of Alleged Contravention

The GST Authority's order pertains to a demand for ineligible Input Tax Credit (ITC) for Financial Year 2025-26. The company, however, has stated its position that the ITC was availed after following the due process of law and in compliance with the conditions prescribed under GST legislation.

Company's Response and Financial Impact

KRN Heat Exchanger and Refrigeration has indicated that it is in the process of taking appropriate legal course of action against the said order, challenging the recovery of tax, levy of interest, and penalty. The company has further stated that there will be no material financial impact on its financial, operational, or other activities, except to the extent of the demands mentioned in the order. The disclosure was made by Santosh Kumar Yadav, Chairman & Managing Director of the company, in accordance with SEBI LODR Regulations.

KRN Heat Exchanger and Refrigeration Limited has approved an investment of ₹235.26 crore in its wholly owned subsidiary, KRN HVAC Products Private Limited (KHPL), to fund the latter's working capital requirements. The Banking and Finance Committee (BFC) of the Board of Directors sanctioned the investment on June 09, 2026. The funds will be deployed through the subscription of 78,41,917 equity shares at an issue price of ₹300 per share, comprising a face value of ₹10 and a securities premium of ₹290 per share.

Investment Structure and Transaction Details

The investment is part of the use of proceeds specified in the Placement Document dated June 01, 2026, relating to a Qualified Institutions Placement (QIP). The transaction, classified as a related party transaction, was conducted at arm's length. KHPL will continue to remain a wholly owned subsidiary of the company following the investment, with no change in the shareholding percentage. The indicative time period for the completion of the acquisition is one month.

Key details of the investment are summarised below:

About KRN HVAC Products Private Limited

KHPL, incorporated on April 07, 2023, is engaged in the manufacturing of heat exchangers and other HVAC products. The subsidiary has demonstrated significant growth in its operations over the past three financial years. For the financial year 2025-26, the entity reported a revenue of ₹218.85 crore, a sharp increase from previous years.

The financial performance of KRN HVAC Products Private Limited over the last three years is detailed below:

Regulatory Compliance

The disclosure was made in compliance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The information has been submitted to BSE Limited and the National Stock Exchange of India Limited and is available on the company's website.