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Kanohar Electricals IPO Opens With Strong GMP, Brokerages Recommend Subscription
Kanohar Electricals is offering some of its shares to the public through an IPO.
The IPO is open from 8 September to 10 September, and investors can buy shares in groups of 23.
Each share costs between ₹601 and ₹632.
The grey market price is higher than the IPO price, suggesting that the shares could list with a gain, although this is not guaranteed.
The company makes transformers and also works on power infrastructure projects.
Its sales, profits and order book have grown strongly in recent years.
Several brokerages think long-term investors can consider the IPO.
However, much of the company’s business comes from transformers and a limited group of customers.
The IPO is also valued at a premium to some competitors, so investors should consider the risks.
Kanohar Electricals’ IPO is open from 8 September to 10 September at ₹601–₹632 per share, with a 23-share lot size.
The grey market premium is reported at ₹195–₹205, or ₹196 in the latest update, implying possible listing gains of about 31–32%.
The ₹1,056-crore issue includes a fresh issue of up to ₹300 crore and an offer-for-sale of up to 1.2 crore shares by K Sons Family Trust.
Brokerages broadly recommend subscribing, especially for the long term, citing growth, profitability, integrated manufacturing and a ₹1,818-crore order book.
Key risks include customer concentration, transformer-business dependence, reliance on government or utility orders and a premium valuation versus Transformers & Rectifiers (India).
- Who
- Kanohar Electricals, promoter K Sons Family Trust, public investors and participating brokerages.
- What
- Kanohar Electricals is launching a ₹1,056-crore IPO comprising a fresh issue and an offer-for-sale.
- Where
- The shares are expected to list on the BSE and NSE; the company operates manufacturing facilities in Meerut.
- When
- The IPO is scheduled for 8–10 September, with allotment expected on 11 September and listing on 16 September.
- Why
- The company plans to use fresh-issue proceeds for capital expenditure, working capital and general corporate purposes, while investors are assessing its power-sector growth prospects.
Reasons to Consider Applying
Reasons for Caution
Power-sector growth
Reasons to Consider Applying
Brokerages cite rising investment in transmission, distribution, renewable-energy integration, railway electrification and grid modernisation as potential drivers of transformer demand.
Reasons for Caution
The company remains dependent on the transformer manufacturing business, which accounted for 83% of FY26 revenue according to one brokerage.
Financial performance
Reasons to Consider Applying
Brokerages highlight strong FY24–FY26 growth, improved profitability, healthy return ratios, low debt and a ₹1,818-crore order book providing revenue visibility.
Reasons for Caution
Strong recent performance does not eliminate the risks from customer concentration and dependence on government and transmission-utility orders.
Valuation and listing gains
Reasons to Consider Applying
Anand Rathi, SBI Securities, Swastika Investmart, Kantilal Chhaganlal Securities and Ventura Securities recommend subscribing, with some focusing on long-term gains; the GMP indicates possible listing gains.
Reasons for Caution
The IPO carries a premium valuation versus Transformers & Rectifiers (India), and grey-market indications and listing gains can change with market conditions.
Key facts
- Price band
- ₹601–₹632 per equity share
- Lot size
- 23 shares, with bids in multiples of 23
- Issue size
- ₹1,056 crore
- Issue structure
- Fresh issue of up to ₹300 crore and OFS of up to 1.2 crore shares
- Grey market premium
- Reported at ₹195–₹205, with the latest update citing ₹196
- Anchor fundraising
- ₹316.72 crore raised from 42 anchor investors at ₹632 per share
- Use of proceeds
- ₹64.1 crore for capital expenditure, ₹155 crore for incremental working capital and the balance for general corporate purposes
- Expected listing
- 16 September on the BSE and NSE
Quotes
Swastika Investmart
Brokerage firm providing an IPO assessment.
“It is having In-house manufacturing and integrated capabilities can support better quality control, execution efficiency and scalability as demand for transformers increases Rising investments in power transmission & distribution, renewable energy integration, railway electrification and grid modernization are expected to drive sustained demand for transformers”
businesstoday.in
“Operational efficiency has also improved materially, with inventory days reducing from 110 in FY24 to 64 in FY26. The issue is valued at 38.6 times FY26 post-issue P/E, which appears reasonable given its strong growth trajectory, niche certifications, robust order pipeline, and favorable industry tailwinds. We recommend 'subscribe' to the issue”
businesstoday.in
Sources
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