Kanohar Electricals’ Rs 1,056 Crore IPO Opens September 8: Should You Apply?

Kanohar Electricals will open its Rs 1,055.74 crore initial public offering (IPO) on September 8, 2026. The Meerut-based transformer maker is returning to the stock market 16 years after it voluntarily delisted from the BSE, Delhi Stock Exchange and Uttar Pradesh Stock Exchange, citing poor liquidity. The company will now list on both the NSE and the BSE.

The IPO closes on September 10. Allotment is expected on September 11 and listing on September 16. The price band is Rs 601-632 per share. The minimum bid is 23 shares, or Rs 14,536 at the upper end.

How The Rs 1,056 Crore IPO Is Structured

The issue comprises a fresh issue of 4.75 million shares worth Rs 300 crore and an offer for sale (OFS) of 11.96 million shares worth Rs 755.74 crore. The fresh issue will fund Kanohar’s expansion plans. The OFS proceeds will go to K Sons Family Trust, the promoter entity.

Up to 50 per cent of the net issue is reserved for qualified institutional buyers (QIBs), at least 35 per cent for retail investors and 15 per cent for non-institutional investors (NIIs).

Nuvama Wealth Management and IIFL Capital Services are the book-running lead managers. MUFG Intime India is the registrar.

A Transformer Business With A Long History

Kanohar was incorporated in Meerut in November 1972. It became a public company in 1994 and listed on three regional exchanges in 1995. It subsequently delisted from all three by late 2010.

Today, transformer manufacturing accounts for 83.43 per cent of its revenue from operations. The rest comes from its engineering, procurement and construction (EPC) business for sub-stations and transmission lines.

Its product portfolio includes power transformers, traction transformers, Scott transformers, distribution transformers, and shunt reactors.

The company has two manufacturing units in Meerut with combined installed capacity of 19,200 MVA as of March 2026.

Kanohar, in its red herring prospectus (RHP), says it is among only five Indian manufacturers with short-circuit test certification for 500 MVA, 400 kV transformers. It is also among four manufacturers certified by the Research Designs and Standards Organisation to make 100 MVA, 132 kV Scott transformers for Indian Railways.

Capacity Is Rising, But One Plant Does Most Of The Work

The Rithani plant operated at less than 1 per cent utilisation in both FY25 and FY26. Almost all production is coming from the Gangol facility. Combined capacity utilisation, however, increased from 16.46 per cent in FY24 to 29.70 per cent in FY25 and 45.99 per cent in FY26.

The IPO proceeds will be used at the Gangol facility for new machinery, automation of backward-integration facilities, office building, and sustainability projects such as solar power and electric vehicles.

The order book has also expanded sharply, rising from Rs 861.47 crore in March 2025 to Rs 1,818.32 crore in March 2026. Transformer manufacturing accounts for 89.19 per cent of the order book.

Profit Turned 7x Over Three Fiscals

Kanohar’s total income stood at Rs 662.86 crore in FY26, up 44.95 per cent from Rs 457.30 crore in FY25 and 135.78 per cent from Rs 281.12 crore in FY24. Its profit after tax (PAT) came in at Rs 129.73 crore in FY26, nearly double the Rs 65.12 crore reported in FY25 and more than seven times the Rs 17.76 crore recorded in FY24.

The company’s earnings before interest, tax, depreciation and amortisation (Ebitda) increased to Rs 180.42 crore in FY26 from Rs 93.39 crore in FY25 and Rs 31.07 crore in FY24. The Ebitda margin improved to 27.22 per cent in FY26 from 20.42 per cent in FY25 and 11.05 per cent in FY24.

The balance sheet remains relatively light on debt. Borrowings stood at Rs 39.04 crore in FY26 against net worth of Rs 372.84 crore. The debt-to-equity (D-E) ratio was around 0.11 times.

Kanohar has not declared a dividend in any of the three years under review.

Customer Concentration Is The Biggest Risk

The company is heavily dependent on a small group of customers. The top 10 customers contributed 93.16 per cent of its revenue from operations in FY26. One customer alone accounted for 31.28 per cent of revenue. That leaves little room for a major customer loss or order delay.

Raw material costs are another concern. Copper conductors and cold-rolled grain-oriented steel are key inputs. Kanohar does not hedge either.

The cost of materials consumed rose to 75.90 per cent of total expenses in FY26 from 59.54 per cent in FY25.

Most of its 35 live contracts as of March 2026 have price-variation clauses, allowing the company to pass on higher input costs. Four contracts, however, are on fixed prices.

The company has also disclosed that some corporate filings from the 1970s and 1980s could not be traced in its records or at the Registrar of Companies.

Is The IPO Expensive

At the upper price band of Rs 632, Kanohar is valued at about Rs 5,005 crore after the issue. The IPO is priced at 38.58 times FY26 earnings on a post-issue diluted basis. At the floor price, the price-to-earnings (P-E) ratio works out to 36.26 times.  That is below the 107.05 times average P-E of the six listed peers cited in the offer document. But the comparison needs context.

Hitachi Energy India trades at 159.55 times earnings and Schneider Electric Infrastructure at 155.12 times. These two stocks pull the peer average sharply higher.

Transformers & Rectifiers (India), the cheapest peer in the comparison, trades at 32.19 times earnings. Kanohar’s valuation is, therefore, not far below the lower end of the peer group.

Its return on net worth, at 34.80 per cent in FY26, is also stronger than most of the cited peers. Only GE Vernova T&D India, at 45.85 per cent, is higher.

Kanohar Electricals IPO GMP Today

The shares of Kanohar were commanding a grey market premium (GMP) of Rs 150 over the upper price band as on September 3, according to websites that track such trades. That implies an indicative listing price of around Rs 782 and a potential listing gain of 23.73 per cent.

Investors should not mistake this for a forecast. GMPs are unofficial and can change quickly before listing.

Should You Apply

Kanohar has a strong order book, rising capacity utilisation, improving margins, and low debt. Its specialised transformer certifications also give it an edge in a growing power infrastructure market.

But the risks also cannot be ignored. The top 10 customers account for more than 93 per cent of revenue, while one customer contributes nearly a third. Copper and steel prices can also pressure margins, as the company does not hedge these inputs. Production is concentrated at one plant.

Then there is structure of the IPO. Only Rs 300 crore will come into the business, while nearly Rs 756 crore will go to the selling promoter through the OFS.

The valuation is not cheap either, but it is also not an obvious outlier against listed transformer and transmission-equipment companies. The sharp jump in profit also needs to be viewed against the low FY24 base.

Kanohar has a credible growth story, but investors considering the issue should weigh the order-book growth and improving profitability against customer concentration, input-cost exposure, and the large promoter sell-down. The GMP should not be the reason to apply.