Pune-based KSH International files DRHP for Rs 745 crore IPO
Pune-based KSH International, the third largest manufacturer of magnet winding wires in India in terms of production capacity in Fiscal 2024, has filed its Draft Red Herring Prospectus (DRHP) with capital markets regulator, Securities and Exchange Board of India (SEBI) to raise Rs 745 crore through Initial Public Offering (IPO).
The IPO, with a face value of Rs 5, is a mix of fresh issue of shares up to Rs 420 crore and an offer-for-sale up to Rs 325 crore by Promoter Selling Shareholders.
The proceeds from the fresh issue to the extent of Rs 225.98 crores for prepayment and/or repayment, in full or in part, of all or a portion of certain outstanding borrowings availed by the Company; Rs 90.06 crore for funding the capital expenditure requirements of the Company towards: purchasing and setting up of new machinery for expansion at its Supa Facility and purchasing and setting up of new machinery at Unit 2 in Chakan, Pune in Maharashtra; Rs 10.41 crore for funding the capital expenditure requirements of the Company towards purchasing and setting up of a rooftop solar power plant for power generation at its Supa Facility; and general corporate purposes.
The Offer is being made through the book-building process, wherein not more than 50% of the net offer is allocated to qualified institutional buyers, and not less than 15% and 35% of the net offer is assigned to non-institutional and retail individual bidders respectively.
KSH International part of the KSH group, commenced its operations in 1981 by manufacturing magnet winding wires in Taloja, Raigad, in Maharashtra and in the last four decades, it has diversified its operations to manufacturing various types of standard and specialized magnet winding wires. It markets and sells its products through its brand ‘KSH’, which has a strong brand recall and reputation in the industry over the years.
It is also the largest exporter of magnet winding wires from India in terms of export revenues in Fiscal 2024, according to a CARE Report, mentioned in the DRHP. Its key products include round enamelled copper/ aluminium magnet winding wires, paper insulted rectangular copper/ aluminium magnet winding wires, continuously transposed conductors, rectangular enamelled copper/ aluminum magnet winding wires and bunched paper insulated copper magnet winding wires. The products are critical components of capital goods such as transformers, motors, alternators and generators. These products (transformers, motors, alternators and generators) find application in end-use industries such as power (generation, transmission and distribution), renewables, industrials, railways, automotives (EV and ICE), home appliances, refrigeration and air conditioning.
The Company has 112 customers as on December 31, 2024 which includes the likes of Bharat Bijlee Limited, Virginia Transformer Corporation, Bharat Heavy Electricals Limited, Georgia Transformer Corporation, Hitachi Energy India Limited, Siemens Energy India Limited, GE Vernova T&D India Limited, Hind Rectifiers Limited, Atlanta Electricals Limited, Toshiba Transmission & Distribution Systems (India) Private Limited, Meidensha Corporation, SGB-SMIT GmbH and Retrasib S.R.L., CG Power and Industrial Solutions Limited, Nidec Industrial Automation India Private Limited, Al Ahleia Switchgear Co. , Emirates Transformer & Switchgear Limited.
KSH International has a significant global footprint, and exports its products to 24 countries as of December 31, 2024, including, USA, UAE, Kuwait, Romania, Saudi Arabia, Germany, Oman, Spain, Bangladesh and Japan, amongst others.
As of December 31, 2024, the company operates three manufacturing facilities, out of which two of these facilities are located in Chakan, Pune and one in Taloja, Raigad and an upcoming fourth facility in Supa, Ahilyanagar (formerly Ahmednagar), which is expected to commence operations in Fiscal 2026. According to the CARE report, with its Supa expansion, KSH is expected to more than double its capacity from 29,045 MT as of December 31, 2024, to 59,045 MT over the next two years.
Despite a decline in market share between FY22 and FY24, Precision Wires India Ltd and Ram Ratna Wires Ltd continue to lead the magnet winding wires market in terms of revenue. However, KSH International Limited has shown notable progress, increasing its market share from 11.19% to 13.70%, signaling a steady upward trajectory.
KSH International Limited’s revenue from operations increased by 31.76% from Rs 1,049.46 crore in Fiscal 2023 to Rs 1,382.82 crore in Fiscal 2024 primarily on account of the increase in volume and metal prices in Fiscal 2024. Its EBITDA has increased from Rs 49.90 crore in Fiscal 2023 to Rs 71.46 crore in Fiscal 2024, while Profit after tax grew from Rs 26.61 crore in Fiscal, 2023 to Rs 37.35 crore in Fiscal, 2024.
For the nine months ended December 31, 2024, revenue from operations stood at Rs 1420.45 crore, EBITDA was Rs 87.35 crore and Profit after tax stood at Rs 49.53 crore.
Nuvama Wealth Management Limited, and ICICI Securities Limited are the book-running lead managers and MUFG Intime India Private Limited is the registrar of the issue. The equity shares are proposed to be listed on the National Stock Exchange of India Limited and BSE Limited.
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