KSH International IPO Opens Today: 10 Key Things To Know Before You Subscribe — Anand Rathi Report

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Anand Rathi Report

Here are the 10 things to know before investing in KSH International IPO

1. KSH International Ltd. launched its initial public offering today, December 16 and closes on Dec. 18.

2. The manufacturer of magnet winding wires in India has fixed the price band in the range of Rs 365-384 per equity share with a face value of Rs 5.

3. The Rs 710-crore IPO is a combination of a fresh issue of shares worth Rs 420 crore and an offer for sale of Rs 290 crore.

4. Investors can place bids starting from a minimum of 39 shares and in multiples thereafter.

5. CICI Securities and Nuvama Wealth Management are the book-running lead managers; and MUFG Intime India Private Ltd. is the registrar of the offer.

6. Objects of the Issue

• Purchase and setup of new machinery at two plants,

• Purchase and setup of a rooftop solar power plant for power generation at Supa Facility.

• Pre-payment, or scheduled repayment, in full or part, of certain borrowings availed by the company.

• General corporate purpose.

7. Strengths:

• One of the leading manufacturers of magnet winding wires in India with a comprehensive suite of products used across multiple end use industries.

• Large, strategically located, manufacturing facilities with focus on advanced technologies and new product and process development.

• Long standing relationships with their diversified customer base both domestically as well as globally.

• Proven track record with necessary certifications and accreditations in an industry which has high barriers to entry.

8. Key Strategies:

• Increase focus on higher value-added critical products, focusing on high value segments and launching new products.

• Increasing their presence in international markets and expand global reach.

• Increasing wallet share of their existing customers.

• Continue to focus on improving operating efficiencies through scale and backward integration.

• Continue to focus on innovation-led digital healthcare to enhance convenience, efficiency and reach.

9. Precision Wires India, and Ram Ratna Wires are the other listed entities in the capital goods space.

10. Key Risk:

• Company depend on certain customers for a significant portion of their revenue from operations. Top 10 customers contributed to 53.97%, 52.54%, 57.10% and 58.99% of their revenue from operations for the three-month period ended June 30, 2025, and Fiscals 2025, 2024 and 2023, respectively. Any decrease in demand from such customers, the loss of such customers or their inability to diversify their customer base could have an adverse effect on business, results of operations, financial condition and cash flows.

• Company’s business is dependent on suppliers to procure their raw materials (top 10 suppliers contributed to 98.91%, 98.45%, 96.93% and 98.58% of their total cost of raw materials and components purchased for the three-month period ended June 30, 2025, and Fiscals 2025, 2024, and 2023, respectively). They have not entered into long-term agreements with these suppliers, and any loss of suppliers or interruptions in the timely delivery of raw materials or volatility in their prices could have an adverse impact on their business, financial condition, cash flows and results of operations.

• Any shortfall in the supply or availability of raw materials including aluminium or copper, which are their primary raw materials (and copper also being their principal raw material), or insulating materials, such as enamel and paper, or an increase in their such material costs, or other input costs, may adversely affect the pricing and supply of their products and have an adverse effect on their business, results of operations and financial condition.

• A significant portion of their revenue from operations i.e. 71.73%, 74.79%, 75.17% and 79.08% of their operating revenue for the threemonth period ended June 30, 2025 and Fiscals 2025, 2024 and 2023, respectively is attributable to the power sector (generation, transmission and distribution) industry (“Power Sector”). Any economic cyclicality coupled with reduced demand or negative trend in the Power Sector industry or other industries that they operate in, could adversely affect their business, results of operations and financial condition.

• Company derive a substantial portion of their revenue (more than 70% in each of the three-month period ended June 30, 2025, and Fiscals 2025, 2024 and 2023) from the sale of specialized magnet winding wires. Any reduction in demand for their key products would have a material adverse effect on their business, financial condition, results of operations and cash flows.

• Company have not yet placed orders in relation to the capital expenditure to be incurred for certain of their proposed objects of the Offer. In the event of any delay in placing the orders, or in the event the vendors are not able to provide the requisite equipment in a timely manner, or at all, the same may result in time and cost over-runs.

Valuation:

KSH International is a prominent manufacturer of magnet winding wires in India, offering a broad portfolio of products catering to diverse end-use industries.

The company operates large, strategically positioned manufacturing facilities with a strong emphasis on advanced technologies and continuous product and process innovation. It maintains long-standing relationships with a diversified customer base across domestic and international markets and possesses a proven track record supported by the requisite certifications and accreditations in an industry characterized by high entry barriers.

At the upper price band company is valuing at P/E of 38.3x with EV/Ebitda of 24.1x to its FY25 earnings and market cap of Rs 26,018 million post issue of equity shares.

We believe that the IPO is fully priced and recommend a “Subscribe-Long Term” rating to the IPO.

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