KSH International, a manufacturer of magnetic winding wires, is looking to raise Rs 710 crore through the public issue, comprising a fresh issue of Rs 420 crore and an offer for sale (OFS) of Rs 290 crore by promoters.The IPO will be priced between Rs 365 and Rs 384 per share and will remain open for subscription till December 18. The company’s shares are proposed to be listed on the NSE and BSE, with a tentative listing date of December 23.
KSH International IPO Subscription Status:
On the first day of the offering, the IPO received a muted response, with only 15% of the total issue subscribed, indicating that overall investor participation is limited.
Retail Individual Investors (RIIs) showed relatively more interest and subscribed to 27% of their allotment, which consists of 68.08 lakh shares.
Non-institutional investors (NIIs) showed weak demand and subscribed to only 6% of the 29.17 lakh shares reserved for them. Qualified institutional buyers (QIBs) showed no interest on Day 1 as no bids were made for their allotted 38.90 lakh shares.
Strong anchor round
Ahead of the public issue, KSH International has raised Rs 213 crore from major investors. The anchor book saw participation from a mix of domestic mutual funds, insurance companies and foreign investors, including HSBC Global Investment Funds, Societe Generale, Kotak Mahindra Life Insurance and Edelweiss Life Insurance.
Company overview
KSH International is the third largest magnet winding wire manufacturer in India by production capacity in FY25 and the largest exporter in the segment by export revenues, according to a CARE report cited in the company’s offer documents.
The company produces a range of standard and specialist magnet winding wires used in transformers, generators, motors and other electrical equipment, with applications in power transmission, renewable energy, data centres, electric vehicles and consumer appliances.
An important differentiator for KSH is its focus on specialized, high-quality products. About 75% of revenues come from specialized magnet wires, such as continuously transposed conductors and insulated rectangular wires, while exports account for about 30-40% of total revenues.
The company is a recognized sub-supplier for high voltage and HVDC systems, with certifications from entities such as Power Grid Corporation of India, NTPC, NPCIL and RDSO, creating high barriers to entry and supporting repeat business.
Financial overview of KSH International:
KSH International has shown strong financial growth over the past three years. Operating revenue rose from Rs 1,049.46 crore in FY23 to Rs 1,928.29 crore in FY25, representing a robust compound annual growth rate (CAGR).
The company’s EBITDA rose to Rs 122.53 crore in FY25 from Rs 49.9 crore in FY23, while profit after tax grew from Rs 26.61 crore to Rs 67.99 crore in the same period. EBITDA margins have steadily improved, driven by a shift to higher value products, although overall margins remain modest as copper, a key raw material, is treated as a pass-through cost.
KSH International plans to use the net proceeds from the IPO primarily to reduce debt and expand capacity. About Rs 226 crore will be allocated to repay loans, while about Rs 87 crore will be invested in new machinery for two of its factories.
A smaller portion of the funds will go toward the installation of a rooftop solar power plant to support the company’s sustainability initiatives, while the remainder will be used for general corporate purposes.
Should you subscribe?
Canara Bank Securities in its IPO note recommended subscribing to the issue with a long-term perspective, citing the company’s strong competitive position, improved profitability per tonne, reduced customer concentration and favorable demand from renewable energy sources, modernization of the electricity grid and growth of data centers.
“In terms of valuation, the price/earnings is around 32 times FY25 earnings, which seems reasonable compared to peers. Therefore, we recommend buying for the long term,” the broker said in its report.
At the same time, analysts warn that risks remain. The company is highly dependent on the energy sector, which accounts for almost three quarters of its turnover, and on a concentrated group of customers and suppliers. High working capital requirements, exposure to commodity price volatility and high debt levels are other factors that investors will need to keep a close eye on.
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