Summary of this article
Meerut-based Kanohar Electricals has filed its DRHP with Sebi for public issue
Here are the details of the company and how much its planning to raise
Kanohar Electricals Ltd. has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for its initial public offering (IPO). The Merut-based transformer manufacturer is planning to ride the investor's appetite in the primary market, and is planning to raise Rs. 300 crore from the fresh issue of shares.
Kanohar Electricals IPO: Offer Size
Kanohar Electricals plans to raise funds through both a fresh issue of shares and an offer-for-sale. The company plans to issue fresh shares in the IPO to raise up to Rs. 300 crore. In the offer-for-sale component, the promoters of the company, K Sons Family Trust, will offer 14.59 million shares of face value of Rs. 2 each.
Kanohar Electricals IPO: Key Financials
Kanohar Electricals earned Rs. 165.5 crore, reportedly in revenue from operations, during the six-month period ended September 30. According to the DRHP, the company reported Rs. 30.67 crore as profit after tax during the same time. In the financial year 2024-25, the company said it earned Rs. 450.6 crore in revenue from operations, higher than Rs. 276.6 crore the year before. The profit after tax in FY25 rose to Rs. 65.11 crore from Rs. 17.75 crore a year ago.
Kanohar Electricals IPO: Business Model
Kanohar Electricals is in the business of manufacturing transformers. The company provides services to several major industries, including power transmission, railways, renewable energy, and power distribution. According to the papers filed by the company, it is one of the five Indian companies to have received certification on short circuit tests for 500 MVA 400 kV transformers, which are used in the power transmission industry.
The company operates in both the transformer manufacturing business and in engineering, procurement, and construction. The company has two manufacturing units, both of which are in Rithani, Meerut, Uttar Pradesh.
Kanohar Electricals IPO: Competitors
Key competitors of Kanohar Electricals in the transformer business verticals include Bharat Heavy Electricals, CG Power and Industrial Solutions, Hitachi Energy and Schneider Electric Infrastructure. Bharat Heavy Electricals, which is also listed in India, is the industry leader and a public sector entity.
Kanohar Electricals IPO: Should you Apply?
Here is a look at Kanohar Electricals’ key strengths and risks, which should be looked at before deciding whether or not to invest in the public issue:
Kanohar Electricals: Key Risks
Here are some of the key risks that Kanohar Electricals faces according to its DRHP:
The company derives a major portion of its revenue from the transformer manufacturing business. Any change in policy or demand for transformers could impact the business.
Both the manufacturing units of the company are situated in Meerut, Uttar Pradesh. The geographical concentration of its manufacturing unit is a key risk.
Kanohar Electricals: Key Strengths
Here are the key strengths that Kanohar Electricals has, according to the draft issue papers filed:
The company is an established player in the transformer manufacturing industry with 40 years of history and caters to several high-growth and intensive industries such as power transmission, railways, and renewable energy.
Strong financials to support the growth of the company. The company has delivered a 21.8 per cent increase in revenue from operations between FY23 and FY25. During the same period, the CAGR on EBITDA of the company was at 81.47 per cent.
Kanohar Electricals IPO: Objective
According to the papers filed with Sebi, Kanohar Electricals is looking to use Rs. 130 crore funds from the fresh issue of shares towards working capital and Rs. 66.74 crore on capital expenditure, which includes buying new machinery and equipment for its Gangol manufacturing facility. Part of the funds will also be used for expansion and automation of backward integration, civil and interior works for an office building, installation of solar power plants, and procurement of electric vehicles for internal logistics. The remainder of the proceeds raised will be used for general corporate purposes.
