Kanohar Electricals IPO Review: 72% OFS, 38x FY26

Company: Kanohar Electricals Ltd · Meerut, Uttar Pradesh · power transformers, gas-insulated switchgear, EPC substations · mainboard IPO, NSE and BSE

Key takeaways

• The book is ₹1,055.74 crore: ₹300 crore fresh, ₹755.74 crore OFS by K Sons Family Trust — about 72% of the issue does not enter the company.
• Restated PAT went ₹17.76 crore → ₹65.12 crore → ₹129.73 crore in FY24–FY26; the order book doubled to ₹1,818.32 crore.
• At ₹632, post-issue mcap is ₹5,005 crore, or 38.58x FY26 earnings — versus Transformers & Rectifiers (India) at 32.19x.
• Top 10 customers were 93.16% of FY26 revenue; one customer was 31.28%. Combined plant utilisation is 45.99%; the Rithani unit ran below 1%.
• Day 1 (8 Sep, 12:03 IST) printed 1.01x overall with QIB at 0.00x. An unofficial GMP of ₹150 was quoted on 3 Sep — unofficial, unregulated, often wrong.

The deal in one paragraph

Kanohar Electricals is a 1972 Meerut transformer and EPC franchise returning to the listed market after a 2010 voluntary delist. The operating story is real: certifications at 400 kV, an order book that doubled in a year, and EBITDA margin that moved from 11% to 27%. The offer in front of you is something else — a ₹756 crore promoter-trust sale next to ₹300 crore of new capital, priced at 38.6x the year profit jumped 7x, with 93% of sales in ten names. Our verdict is avoid at this price; the reasoning is below.

Data

Issue structure

Item	Figure	Units
Total issue	1,055.74	₹ cr
Fresh issue	300.00	₹ cr
OFS (K Sons Family Trust)	755.74	₹ cr
Price band	601–632	₹ / share
Lot	23	shares (₹14,536 at the cap)
Promoter pre-Offer	99.72	%
Listing (tentative)	16 Sep 2026	NSE + BSE

Source: Outlook Money; Bajaj Broking. Fresh proceeds are earmarked for Gangol capex, working capital and general corporate purposes. The company does not receive OFS cash.

The OFS is a sale by the promoter trust; none of it reaches the company.

Units: ₹ cr · Source: Outlook Money; Bajaj Broking

Financials (restated, ₹ cr)

	FY24	FY25	FY26
Total income	281.12	457.30	662.86
EBITDA	31.07	93.39	180.42
EBITDA margin	11.05%	20.42%	27.22%
PAT	17.76	65.12	129.73
Net worth	178.12	243.13	372.84
Borrowings	—	—	39.04
Order book (Mar)	—	861.47	1,818.32

Units: ₹ crore except margins. Source: Outlook Money; Bajaj Broking. Trade Brains prints FY26 revenue from operations as ₹653.84 crore — a ₹9 crore gap versus the ₹662.86 series; flagged, not forced into the multiple. Operating cash flow was not in the secondary notes I used.

PAT rose 7x over the three years; the 38.6x asking multiple is struck on the FY26 print.

Units: ₹ crore · Source: Outlook Money; Bajaj Broking

Valuation at the upper band

Metric	At ₹632
Post-issue mcap	₹5,005 cr
P/E on FY26 PAT	38.58x
P/E on FY25 PAT (derived)	~76.9x
EV/EBITDA FY26	28x
TRF (India) P/E	32.19x
Hitachi Energy India P/E	159.55x
Schneider Infra P/E	155.12x
RHP peer-average P/E	107.05x

Units: rupees crore and times. Source: Outlook Money; Business Today (Anand Rathi EV/EBITDA). Hitachi and Schneider pull the average; they are not mid-cap transformer clones.

TRF (India) is the nearest mid-cap transformer comparable; Hitachi and Schneider are much larger, differently priced businesses.

Units: times (x) · Source: Outlook Money; Business Today

Subscription and unofficial GMP

Day 1, 8 Sep 2026, 12:03 IST (IPO Central): overall 1.01x, retail 1.38x, NII 1.47x, QIB ex-anchor 0.00x. An unofficial GMP of ₹150 over ₹632 was quoted on 3 Sep (Outlook). Grey-market prints are informal, unregulated and often wrong; I do not treat them as a listing forecast.

Risks

• OFS weight. ₹756 crore leaves with the promoter trust; ₹300 crore stays.
• Customer concentration. Ten names are 93% of FY26 sales; one name is 31%.
• One working plant. Combined utilisation 46%; Rithani idle.
• Unhedged copper and CRGO, plus four fixed-price contracts.
• 38.6x on the spike year; ~77x if FY25 is closer to earning power.
• Missing 1970s–80s RoC filings, as disclosed.

AlphaResearch verdict

Avoid at ₹632. Clears 1 of 5 checks (business). Numbers are partial (no operating cash disclosed). Price and red flags fail.

Avoid at ₹632Clears 1 of 5

1. ✓Business · ClearsReal transformer and EPC franchise; 400 kV certification; order book doubled to ₹1,818 crore.
2. ~Numbers · PartialPAT ₹17.76 → ₹129.73 crore, but operating cash flow is not disclosed in the notes used; utilisation 46%.
3. ✗Price · Fails38.58x FY26 vs TRF (India) 32.19x; ~76.9x on FY25 PAT.
4. ✗Structure · Fails₹755.74 crore of ₹1,055.74 crore (72%) is an OFS by the promoter trust.
5. ✗Red flags · FailsTop 10 customers 93.16% of revenue; one plant idle; QIB 0.00x on day one.

Why: ₹756 crore of the ₹1,056 crore leaves with the promoter trust; the 38.6x asking multiple sits on the one year profit jumped 7x; 93% of revenue comes from ten customers; the QIB book stood at 0.00x after day one. A real transformer franchise, priced as if the spike year is the new base.

What flips this verdict: QIB demand above 5x by the 10 Sep close with named mutual-fund follow-through moves us to Neutral. Two post-listing quarters holding EBITDA margin at or above 22% with disclosed positive operating cash — or a live print near the TRF multiple on FY26 — earns a full re-read.

Dates: book closes 10 Sep; allotment 11 Sep; listing tentatively 16 Sep 2026.

A companion video is planned; this article is the source of every number it will be allowed to speak.

Full working file: docs/ipo_analysis/kanohar_electricals.md.

Disclaimer

AlphaResearch is not a SEBI-registered investment adviser or research analyst. The verdict in this article is AlphaResearch’s independent opinion, formed from publicly available information as of the date shown; it is not personalised investment advice and does not consider your financial situation, goals or risk tolerance. Figures are taken from the sources listed below and may contain errors; verify them in the original filings. Investing in securities involves risk, including loss of principal. Consult a SEBI-registered adviser before acting on anything here.

Position disclosure: none.