Kanohar Electricals IPO Review: 72% OFS, 38x FY26
A Meerut transformer maker is asking ₹1,056 crore, 72% of it an OFS, at 38.6x FY26. Here is the issue structure, the 7x profit jump, and the five checks I run.
By AlphaResearch · 8 Sept 2026 · 10 min read
Issue snapshot
| Company | Kanohar Electricals Ltd — kanohar.com | ||
|---|---|---|---|
| Issue size | ₹1,056 crore | Price band | ₹601–₹632 |
| Fresh issue | ₹300 crore | Offer for sale | ₹756 crore |
| Lot size | 23 shares | Exchange | NSE |
| Bidding | 8–10 Sept 2026 | Listing | 16 Sept 2026 |
Company: Kanohar Electricals Ltd · Meerut, Uttar Pradesh · power transformers, gas-insulated switchgear, EPC substations · mainboard IPO, NSE and BSE
Key takeaways
- IssueThe 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.
- FinancialsRestated PAT went ₹17.76 crore → ₹65.12 crore → ₹129.73 crore in FY24–FY26; the order book doubled to ₹1,818.32 crore.
- ValuationAt ₹632, post-issue mcap is ₹5,005 crore, or 38.58x FY26 earnings — versus Transformers & Rectifiers (India) at 32.19x.
- ConcentrationTop 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%.
- DemandDay 1 closed (8 Sep, 18:54 IST) at 2.73x overall: NII 4.90x, retail 3.36x, QIB ex-anchor 0.03x. Anchors put in ₹316.72 crore on 7 Sep. The unofficial GMP was ₹198 on 8 Sep (₹150 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. Two kinds of applicant read this differently. The day-1 book says demand is real but institutional money has not shown up yet; the balance sheet says the price is for the spike year. Our verdicts are neutral for listing gains and avoid for a long-term hold at ₹632; 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.
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.
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.
Subscription and unofficial GMP
Subscription by category, day 1 of 3 (book 8–10 Sep 2026):
| Category | Shares offered | 8 Sep 12:03 IST (IPO Central) | 8 Sep 18:54 IST, day-1 close (Chittorgarh) |
|---|---|---|---|
| QIB ex-anchor | 33,40,950 | 0.00x | 0.03x |
| NII | 25,05,713 | 1.47x (bNII 1.16x, sNII 2.08x) | 4.90x |
| Retail | 58,46,663 | 1.38x | 3.36x |
| Overall (ex-anchor) | — | 1.01x | 2.73x |
Units: times subscribed (x) on shares offered ex-anchor. Source: IPO Central; Chittorgarh (NSE + BSE data).
Anchor book (7 Sep 2026, Chittorgarh): ₹316.72 crore for 50,11,424 shares at ₹632 — 30% of the issue — across 42 allottees. The largest lines were ICICI Prudential Multicap Fund (₹34.12 crore), ICICI Prudential's ISIF Equity Ex-Top 100 Long-Short Fund (₹24.37 crore), Ashoka WhiteOak Emerging Markets Equity Fund (₹21 crore), and ₹14 crore each from Mirae Asset Small Cap Fund, Motilal Oswal Balanced Advantage Fund, Allianz India Equity and HSBC Asia ex-Japan Smaller Companies; five Kotak Mahindra Mutual Fund schemes took ₹8 crore or less apiece. Half the anchor shares are locked for 30 days, half for 90.
Unofficial grey-market premium over ₹632 (IPO Watch, updated 17:45 IST daily): ₹150 on 3 Sep, ₹200 on 4 Sep, ₹205 on 7 Sep, ₹198 on 8 Sep (~31%). IPO Central quoted ₹196 at 12:03 IST on 8 Sep. 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
At ₹632 — Listing gains: Neutral · Long-term hold: Avoid. Two applicants, two calls. The demand read is for the applicant who intends to sell on or after listing; the five checks are for the one who intends to hold.
For listing gains
The day-1 close is respectable for a ₹1,056 crore book — 2.73x overall, NII 4.90x, retail 3.36x — and the ₹316.72 crore anchor book carries 42 names including ICICI Prudential, Kotak, Mirae, Motilal Oswal, Allianz and HSBC, which is institutional endorsement of the price. What is missing is the institutional book itself: QIB ex-anchor stood at 0.03x, and on mainboard issues that category bids on day 3, so the shape of this IPO is not known yet. The unofficial grey-market premium (₹198, ~31%) has eased from ₹205 and is, as always, unregulated and often wrong. Allotment odds already matter: at 3.36x, fewer than one in three one-lot retail applications would be allotted, and that ratio usually falls further by the close. Demand evidence so far supports a listing application only conditionally — Listing gains: Neutral, pending the QIB book.
- Anchor book · Clears₹316.72 crore, 42 allottees; ICICI Prudential, Kotak, Mirae, Motilal Oswal, Allianz, HSBC named.
- QIB demand · FailsQIB ex-anchor 0.03x at the day-1 close (8 Sep 18:54 IST); institutions usually bid on day 3.
- NII demand · Clears4.90x at the day-1 close, up from 1.47x at 12:03 IST.
- Retail demand · Clears3.36x at the day-1 close; allotment odds already below one in three per lot.
- Grey market (unofficial) · Partial₹198 (~31%) on 8 Sep, easing from ₹205; unofficial, unregulated, often wrong.
Demand evidence as of the 8 Sep close. Not a listing-price forecast.
For a long-term hold
Long-term hold: Avoid at ₹632. Clears 1 of 5 checks (business). Numbers are partial (no operating cash disclosed). Price, structure and red flags fail.
- Business · ClearsReal transformer and EPC franchise; 400 kV certification; order book doubled to ₹1,818 crore.
- Numbers · PartialPAT ₹17.76 → ₹129.73 crore, but operating cash flow is not disclosed in the notes used; utilisation 46%.
- Price · Fails38.58x FY26 vs TRF (India) 32.19x; ~76.9x on FY25 PAT.
- Structure · Fails₹755.74 crore of ₹1,055.74 crore (72%) is an OFS by the promoter trust.
- Red flags · FailsTop 10 customers 93.16% of revenue; one plant idle; QIB ex-anchor 0.03x at the day-1 close.
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 0.03x at the day-1 close. A real transformer franchise, priced as if the spike year is the new base.
What flips this verdict — listing gains: QIB ex-anchor above 5x at the 10 Sep close with the unofficial GMP still above ₹150 moves the listing call to Subscribe; NII fading below 3x or the GMP below ₹60 moves it to Avoid.
What flips this verdict — long-term hold: 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.
Position disclosure: none.
Sources
- Outlook Money, Kanohar IPO structure and RHP financials (accessed 8 Sept 2026)
- Bajaj Broking, Kanohar IPO note (accessed 8 Sept 2026)
- Business Today, Day-1 open and broker P/E (accessed 8 Sept 2026)
- IPO Central, Day-1 subscription 12:03 IST and unofficial GMP ₹196 (accessed 8 Sept 2026)
- Chittorgarh, Day-1 close subscription by category (8 Sep 18:54 IST) and anchor allocation (accessed 8 Sept 2026)
- IPO Watch, unofficial GMP trend to 8 Sep 17:45 IST (accessed 8 Sept 2026)
- Trade Brains, alternate FY26 revenue print (accessed 8 Sept 2026)