A five-decade-old Meerut-based transformer maker opens its Rs 1,055.74 crore mainboard issue on September 8
A leading domestic transformer manufacturer catering to power transmission, railways, renewables and distribution plans to raise Rs 1,055.74 crore via a mainboard listing on BSE and NSE.
Kanohar Electricals Ltd (KEL), a Meerut, Uttar Pradesh-based transformer and EPC company incorporated in 1972, opens for subscription on September 8 with the issue closing on September 10.
It is one of India’s leading domestic transformer manufacturers by FY2026 revenue, catering to high-growth industries including power transmission, railways, renewable energy and power distribution (per a CARE report).
This is a play on India’s power-infrastructure and grid-modernisation build-out, backed by a genuinely differentiated set of technical credentials.
The certifications are the moat. As of March 31, 2026, KEL is one of only five companies in India with short-circuit test certification for 500 MVA 400 kV transformers used in power transmission — and it has tested over 200 ratings at scale.
It is one of only four Indian manufacturers RDSO-certified (Indian Railways’ R&D wing) to make 100 MVA 132 kV Scott transformers, and one of just two certified for 100 MVA 220 kV Scott transformers — both catering to rail-electrification demand.
These certifications qualify it to bid for key high-value orders, evidenced by a recent Rs 568.67 crore order for 500 MVA 400 kV power transformers from POWERGRID in June 2025.
The business runs in two segments. The Transformer Manufacturing Business is the core; the EPC Business undertakes engineering, procurement and construction of substations and transmission lines, executing turnkey projects — air and gas insulated substations, bay augmentation up to 400 kV, and transmission lines across 132/220/400 kV.
KEL also has GIS (gas insulated switchgear) capability through a technical collaboration with Taiwan’s CHEM (valid to November 2027), though it has generated no GIS revenue in the last three fiscals as no GIS-requiring tenders were awarded.
The backward integration is a genuine margin driver. KEL produces critical components in-house — transformer tanks and pressed-steel radiators — sourcing steel plates and coils and fabricating them internally rather than buying from third parties, ensuring quality control, operational efficiency and cost optimisation.
As of March 31, 2026, it had 526 employees plus 46 contract workers, and an order book of Rs 1,818.32 crore — providing strong revenue visibility. The promoters are the Singhal family (Dinesh, Adesh, Vivek, Abhishek, Virat and Aditya Singhal).
Issue Details
| Particulars | Details |
|---|---|
| Issue Opens | September 8, 2026 |
| Issue Closes | September 10, 2026 |
| Listing | BSE, NSE (Mainboard) |
| Listing Date | September 16, 2026 |
| Price Band | Rs 601 – Rs 632 per share |
| Face Value | Rs 2 |
| Issue Size | Rs 1,055.74 crore (~1,67,04,750 shares) |
| Fresh Issue | Rs 300.00 crore (~47,46,835 shares) |
| Offer for Sale | Rs 755.74 crore (1,19,57,915 shares) |
| Min. Application | 23 shares (multiples thereafter) |
| Min. Retail Investment | Rs 14,536 |
| IPO as % of Post-IPO Capital | 21.10% |
| Post-IPO Market Cap | Rs 5,004.61 crore |
| Lead Managers | Nuvama Wealth Management, IIFL Capital Services |
| Registrar | MUFG Intime India Pvt. Ltd. |
The issue is majority OFS. From the fresh proceeds (Rs 300 crore), the company will utilise Rs 64.18 crore for capex (new machinery/equipment, civil construction and interiors for its office building, and a solar power plant), Rs 155.00 crore for working capital, and the rest for general corporate purposes; the OFS accounts for Rs 755.74 crore.
So around 72% of the raise goes to selling shareholders rather than into the business — a key caveat, though the Rs 300 crore fresh component meaningfully funds capacity and working capital.
Post-issue, paid-up equity capital will increase from Rs 14.89 crore to Rs 15.84 crore.
Price Band Analysis
At the upper band of Rs 632, on FY26 earnings the issue is valued at a post-issue P/E of about 38.58x (EPS Rs 16.38, RoNW ~34.8%).
On book value, it is priced at a P/BV of 12.62 on the March 31, 2026 NAV of Rs 50.09, easing to 7.44x on the post-IPO NAV of Rs 84.97 at the upper cap.
On the FY25 base the P/E is a much higher 76.89x — so on recent average earnings, the source note reads the issue as greedily priced, while Swastika (below) frames ~34.5–36.3x FY26 EPS as reasonable versus peers.
According to a note by Swastika Investmart Ltd, “at ~34.5–36.3x FY26 EPS, valuation is reasonable versus peers, with IPO proceeds supporting expansion. Long-term investors can consider the IPO for its strong fundamentals, while it may also offer listing-gain potential, subject to market conditions.”
GMP Watch
The Kanohar Electricals IPO GMP ranged from a low of ₹30 to a high of ₹205–211, and stood at around ₹185–211 in the days around opening — implying a listing gain of roughly 29–33% over the Rs 632 upper band.
As always, GMP is unofficial, unregulated and unendorsed.
Financial Performance
| Particulars (Rs cr) | FY24 | FY25 | FY26 |
|---|---|---|---|
| Total Income | 281.12 | 457.30 | 662.86 |
| Net Profit (PAT) | 17.76 | 65.12 | 129.73 |
| PAT Margin (%) | 6.32 | 14.24 | 19.57 |
| RoCE (%) | 16.69 | 47.61 | 70.13 |
Total income more than doubled from Rs 281.12 crore in FY24 to Rs 662.86 crore in FY26 (up 45% in FY26), while PAT surged over 7x, from Rs 17.76 crore to Rs 129.73 crore.
Margin expansion drove this — PAT margin tripled from 6.32% to 19.57%, and RoCE leapt from 16.69% to a remarkable 70.13%, reflecting the backward-integration benefits, operating leverage and a richer product mix toward high-value power transformers.
The return profile is outstanding (average RoNW of 27.99% over three fiscals, average EPS of Rs 12.03), and the order book of Rs 1,818 crore gives strong forward visibility.
Peer Comparison
The offer document lists Hitachi Energy, BHEL, Schneider Electric Infra, CG Power, Transformers & Rectifiers, and GE Vernova as peers, trading at P/Es of roughly 34.9x to 152x (as of September 4, 2026). These are far larger and more diversified power-equipment players, so the comparison isn’t strictly apples-to-apples — but KEL’s ~38.6x sits at the lower end of that range while it posts sector-leading return ratios, which lends the valuation partial cover.
Risks to Consider
Full valuation and margin sustainability. On FY26 the ask is ~38.6x (76.89x on FY25), and PAT margin/RoCE have surged dramatically over two years; the market is paying up for that, so any normalisation of the recent margins would expose the multiple.
Competitive, fragmented, order-driven industry. KEL operates in a highly competitive and fragmented segment where much revenue comes from tenders (heavily linked to POWERGRID, railways and utilities), so future growth depends on continued order wins, and any concentration in a few large orders adds lumpiness.
Working-capital intensity and execution risk apply. Transformer manufacturing and EPC are capital- and working-capital-heavy (Rs 155 crore of proceeds go to working capital), and EPC turnkey projects carry execution, delay and cost-overrun risk. The GIS collaboration has generated no revenue in three years.