Kanohar Electricals will open its ₹1,055.74 crore IPO on September 8, 2026, with a price band of ₹601–₹632 per share. Brokerage firm Anand Rathi has assigned a 'Subscribe – Long Term' rating, noting the company's strong profit trajectory in the power infrastructure sector. Investors should weigh the premium valuation and the company's high working capital needs before making decisions.
Kanohar Electricals Limited, a transformer and EPC (Engineering, Procurement, and Construction) service provider, is preparing to launch its Initial Public Offering (IPO) for public subscription from September 8, 2026, to September 10, 2026. The company has set a price band of ₹601–₹632 per equity share for the issue.
The offering is a mix of a fresh issue of shares worth up to ₹300 crore and an offer-for-sale (OFS) of approximately ₹755.74 crore by existing shareholders, bringing the total issue size to ₹1,055.74 crore. Brokerage house Anand Rathi has initiated coverage with a 'Subscribe – Long Term' rating, drawing attention to the company’s strong financial growth and established presence in the power transmission and renewable energy segments.
Financial Performance and Growth
The company has demonstrated rapid growth over the last few years. According to financial data leading up to the IPO, the firm's revenue from operations rose significantly from ₹276.69 crore in FY24 to ₹653.84 crore in FY26. Profitability has also followed a strong upward trend, with net profit increasing from ₹17.61 crore to ₹129.71 crore during the same period. This growth highlights the company's ability to capitalize on the ongoing expansion in India's power distribution and infrastructure sectors.
Valuation and Market Context
At the upper price band of ₹632, the stock is being valued at approximately 38.6x its FY26 Price-to-Earnings (P/E) ratio. This valuation is notably higher than some industry peers, such as Transformers & Rectifiers (India) Limited, which trades at a P/E of around 32.2x. While the premium reflects investor optimism regarding the company's aggressive growth trajectory, it also means the stock is priced with the expectation of sustained high performance in the future.
Business Model and Operational Risks
Founded in 1972, Kanohar Electricals operates a dual-business model. The transformer division manufactures equipment for power transmission and railways, while the EPC division handles turnkey infrastructure projects. While this integrated approach allows the company to manage complex, large-scale projects, it also introduces specific business risks. The EPC business is inherently capital-intensive and requires significant investment in working capital to manage project cycles, which is why a portion of the IPO proceeds is earmarked for these requirements.
Furthermore, the company faces concentration risk due to its heavy reliance on government and Public Sector Undertaking (PSU) contracts. Delays in government project timelines, changes in public sector spending, or policy shifts in the power infrastructure sector could directly impact the company's revenue and project execution. Investors may want to monitor the company’s ability to manage its working capital efficiently and diversify its client base beyond public sector entities. The grey market sentiment, which indicated a potential listing premium, suggests initial market interest, but investors should focus on the long-term execution of the order book.