KRN Heat Exchanger and Refrigeration has strengthened its domestic revenue pipeline through a significant contract win by its wholly owned subsidiary, KRN HVAC Products Private Limited. The company disclosed to stock exchanges on July 23, 2026, that it received an order for the supply of heat exchanger coils valued at ₹50.87 crore. This development highlights the subsidiary’s growing capability in securing large-scale projects within the domestic HVAC sector, adding substantial value to the company’s order book without involving related-party transactions.

The total contract value comprises a base amount of ₹43.11 crore, with an additional ₹7.76 crore accounted for as Integrated Goods and Services Tax (IGST). Delivery of the coils will be executed according to the specific terms outlined in the order agreement. The transaction is classified as being in the normal course of business, with no internal orders included.

Order Financials

The financial breakdown of the secured contract is detailed below:

Transaction Context

KRN Heat Exchanger emphasized that the order was obtained independently of its promoter group. The company explicitly stated that neither the promoters nor any group companies have an interest in the entities that awarded the project. Consequently, the transaction does not fall under the definition of a related-party transaction under regulatory guidelines.

Santosh Kumar Yadav, Managing Director of KRN Heat Exchanger and Refrigeration Limited, signed the disclosure filed with the Bombay Stock Exchange and the National Stock Exchange of India Limited. The announcement reflects the company's ongoing efforts to expand its footprint in the domestic heat exchanger market through its specialized subsidiary operations.

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.