Ka͏noh͏ar Electricals IPO

Kanohar Electricals Limited, incorporated in 1972, stands as a formidable entity in the Indian transformer manufacturing landscape. The company’s operations are strategically divided into two key business segments: Transformer Manufacturing and Engineering, Procurement, and Construction (EPC). This dual focus allows it to cater to a diverse range of industries including power transmission, railways, renewable energy, and power distribution, providing end-to-end solutions for India’s energy infrastructure.

Manufacturing and Operational Footprint

The company’s operational backbone consists of two manufacturing facilities located in Rithani and Gangol, Meerut, Uttar Pradesh. With an aggregate transformer manufacturing capacity of 19,200 MVA as of September 30, 2025, these facilities are well-equipped to handle complex orders. The Gangol facility is capable of manufacturing transformers up to 500 MVA, 400 kV, and is also equipped to produce 765 kV transformers, showcasing its technical prowess. To support its pan-India operations, the company maintains five regional offices in major cities like Delhi, Mumbai, and Bengaluru.

Management and Promoter Expertise

Kanohar Electricals Limited is guided by a highly qualified and experienced promoter family, with the third generation currently overseeing its leadership and strategy. The Chairman and Managing Director, Dinesh Singhal, an IIT Roorkee graduate, brings over four decades of industry experience. The management team is further strengthened by other IIT graduates, including Adesh Singhal, Vivek Singhal, and Abhishek Singhal, who lead key functions such as engineering, pan-India expansion, and design and development.

Customer Base and Execution Capability

The company boasts a successful track record of executing orders for large and marquee clients, including Power Grid Corporation of India Limited (POWERGRID), which awarded its single largest order for 500 MVA 400 kV transformers in June 2025. Its customer base also includes state utilities, Indian Railways, and various private sector companies. The nature of its contracts, particularly with government entities, provides structured payment terms and lower payment risk, contributing to predictable cash flows.

Industry Outlook

India’s Power Infrastructure: A Decade of Transformation

The Indian transformer market is on a strong growth trajectory, driven by the nation’s ambitious infrastructure goals. From CY24 to CY30, the market is projected to grow at a CAGR of 6.7%, reaching an estimated USD 6,822.9 million. This expansion is underpinned by government initiatives focused on rural electrification, grid modernization, and the integration of renewable energy sources. The power transmission sector is seeing massive line additions, with an estimated 163,000 Ckm of lines expected to be added until FY32, with the 400kV segment having the maximum share.

High-Growth Segments: Railways and Renewables

The Indian Railways’ modernization and electrification drive is a significant growth driver. The expansion of high-speed rail networks is creating a steady demand for specialized traction and Scott transformers, with the market for such specialized equipment projected to reach USD 105.6 million by CY30. Concurrently, India’s renewable energy sector is a powerhouse of growth. Having crossed 200 GW of installed capacity, with a target of 500 GW by 2030, the sector creates immense demand for transformers to ensure grid stability and efficient power flow from solar and wind projects.

Sector Advantages

The high-growth sectors that Kanohar Electricals caters to offer specific advantages:

• Power Transmission: Lower payment risk with transmission utilities, structured tariffs, and pre-approved projects.

• Railways: Government-backed electrification projects, long-term contracts for revenue stability, and standardized specifications.

• Renewable Energy: Rapid growth, strong government incentives, and a critical need for reliable transformers for grid stability.

How Will Kanohar Electricals Limited Benefit

• Kanohar Electricals Limited is perfectly positioned to ride the wave of the projected 6.7% CAGR in the Indian transformer market through CY30, capturing a larger share as the market expands.

• The company’s capability to manufacture 500 MVA 400 kV and 765 kV transformers allows it to capitalize on the significant line additions expected in the extra high voltage and ultra-high voltage segments over the coming decade.

• As one of the few RDSO-certified manufacturers for specialized Scott transformers, the company is uniquely positioned to secure long-term, high-value contracts from Indian Railways for its ongoing network electrification projects.

• With India’s renewable energy capacity set to nearly triple to 500 GW by 2030, the company can leverage its ability to supply crucial transformers and shunt reactors required for integrating this vast and fluctuating renewable power into the national grid.

• The company’s integrated EPC business enables it to bid for and win complex turnkey projects, capturing a higher share of the project value compared to standalone equipment suppliers, leading to larger contract sizes.

• The structured payment mechanisms and pre-approved budgets associated with its government and PSU clientele, which form a significant part of its revenue, provide predictable cash flows and lower default risk.

Peer Group Comparison

Name of the company	Revenue (in ₹ million)	Face value (₹)	P/E ratio	EPS (₹)	RoNW (%)	NAV  (₹ )
Kanohar Electricals Limited	4,506.12	2	[●]*	8.75	26.78	32.66
Peer Group
Hitachi Energy India Limited	63,849.30	2	208.09	90.36	9.11	945.76
Bharat Heavy Electricals Limited	2,83,394.80	2	203.74	1.47	2.16	70.90
Schneider Electric Infrastructure Limited	26,367.10	2	64.04	11.21	1.43	21.78
CG Power and Industrial Solutions Limited	99,086.60	2	101.74	6.38	28.91	22.02
Transformers & Rectifiers (India) Limited	20,193.82	1	53.31	6.31	17.02	42.37
GE Vernova T&D India Limited	42,923.00	2	130.21	23.76	34.36	28.21

*To be finalised upon determination of the Offer Price.

Key Strategies for Kanohar Electricals Limited

Capitalizing on Industry Tailwinds through Capacity Expansion

Kanohar Electricals Limited aims to capitalize on the robust growth of the Indian transformer market by strengthening its manufacturing capabilities. A portion of the IPO proceeds will be used to increase its transformer manufacturing capacity by an additional 18,000 MVA. This expansion is focused on key high-demand offerings like 500 MVA 400 kV power transformers and specialized Scott transformers, positioning the company to execute larger and more complex orders efficiently.

Strengthening Backward Integration Capabilities

A cornerstone of Kanohar Electricals Limited’s strategy is to deepen its backward integration. The company plans to utilize a portion of the Net Proceeds to expand its in-house component manufacturing, specifically by setting up an automatic radiator manufacturing plant. This initiative will further reduce dependency on external vendors, ensure stricter quality control, improve operational efficiency, and secure the supply chain for critical components.

Strategic Focus on New Product Development

Kanohar Electricals Limited is committed to innovation, with a strategic focus on two key areas: expanding its transformer portfolio into the ultra-high voltage segment (765 kV) and developing specialized solutions for railway electrification. The company aims to capture opportunities in the 765 kV market and create new products like ‘V-connected’ auto-transformers to meet the complex needs of emerging high-speed rail corridors.

Commitment to Robust Execution Standards

Ensuring robust execution in its EPC business is a core strategic priority for Kanohar Electricals Limited. The company focuses on optimizing project delivery for substations and transmission lines by mitigating risks associated with long project cycles, complex supply chains, and regulatory approvals. This is achieved through careful planning, strategic vendor partnerships, and proactive engagement with authorities to ensure timely project commissioning.

Ensuring Supply Chain Security

Recognizing the increasing competition for critical raw materials, Kanohar Electricals Limited places a high priority on ensuring supply chain security. The company plans to maintain adequate working capital liquidity to support evolving vendor payment terms, such as advance payments or shorter credit periods. This prudent financial management allows the company to secure timely raw material supply, reduce execution risks, and meet delivery schedules consistently.