KSH International IPO opens Tuesday: Should you subscribe to the ₹710 crore issue?

The ₹710 crore initial public offering (IPO) of magnet winding wire manufacturer KSH International will open for subscription on Tuesday, December 16, and close on December 18.

The price band for the issue has been fixed at ₹365 to ₹384 per share, with a face value of ₹5 each. At the upper end of the band, the company will command a post listing market capitalisation of ₹2,602 crore.

Brokerage views

SBI Securities has maintained a 'Neutral' rating on the issue, saying that it would prefer to monitor the company's performance after listing.

At the upper price band, SBI Securities said that the IPO is valued at FY25 P/E and EV/EBITDA multiples of 38.3x and 20.7x respectively, based on post issue capital. Compared with its closest peers, the brokerage said the valuation appears fair, led by a slightly superior margin profile.

Angel One, however, has recommended a 'Subscribe' rating for medium to long term investors. The brokerage cited strong earnings growth, improving return ratios, leadership in the magnet winding wires segment, and favourable demand tailwinds from power, renewables, EVs and industrial applications as key positives supporting long term visibility.

Arihant Capital has also assigned a 'Neutral' rating to the issue. According to the brokerage, KSH International is well placed to benefit from secular electrification trends such as rising EV penetration, renewable energy expansion, and power infrastructure modernisation.

It mentioned the company's execution track record, with a 35.55% revenue CAGR and a 59.83% PAT CAGR, along with a diversified customer base of 122 accounts across 24 countries.

Lot sizes and investment details

Retail investors can bid for a minimum of one lot comprising 39 shares, requiring an investment of ₹14,976 at the upper end of the price band. Bids can be made in multiples of 39 shares thereafter.

For small HNIs, the minimum application size is 546 shares, translating to an investment of ₹2,09,664, while big HNIs will need to apply for at least 2,613 shares, amounting to a minimum investment of ₹10 lakh.

Issue structure

The IPO consists of a fresh issue worth ₹420 crore and an offer for sale of up to ₹325 crore by promoters Kushal Subbayya Hegde, Pushpa Kushal Hegde, Rajesh Kushal Hegde, and Rohit Kushal Hegde.

Pre IPO placement

Ahead of the issue, KSH International completed a pre IPO placement of around ₹35 crore. In consultation with its book running lead managers, the company allotted 9.11 lakh equity shares through a private placement at ₹384 per share, including a premium of ₹379.

The placement saw participation from Malabar India Fund, Jabeen Ajay Menon, Ajay Menon, Sunil Nagayya Shetty, Salil Ajay Bhargava, and Rupal K Sancheti. Malabar India Fund was allotted 8.51 lakh shares on December 8 for ₹32.7 crore, while Rupal K Sancheti received shares worth ₹1.5 crore and Salil Ajay Bhargava was allotted shares valued at ₹0.5 crore.

Company background

KSH International is among India's leading manufacturers of magnet winding wires and, according to a CARE report, is expected to emerge as the country’s largest exporter in this segment by export revenue in FY25.

The company commenced operations in 1981 with a manufacturing facility in Taloja, Raigad, Maharashtra, and has since expanded its product portfolio to include a wide range of standard and specialised magnet winding wires customised to client requirements.