Kanohar Electricals, Madhur Iron & Steel File IPO Papers with SEBI

Transformer manufacturer Kanohar Electricals, along with structural steel manufacturer Madhur Iron & Steel, have submitted draft Red Herring Prospectuses (DHRP) to the Securities and Exchange Board of India (SEBI) to raise funds via a public offering. Both companies are looking to list on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

Kanohar's DHRP indicates that it plans to make a new issue of ₹300 crores and also has an offer for sale of 14.59 million shares by its promoter, K Sons Family Trust. Meanwhile, Madhur would like to raise funds through a pure new issue of 10 million shares.

The filings may herald a new chapter for the primary marketplace, given current volatility.

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Kanohar Electricals Seeks Growth Capital

The company will use the funds raised by the IPO to purchase machinery, make equity investments, build an office, implement sustainability initiatives and fund ongoing operating expenses. The remainder is set aside for general corporate purposes.

Kanohar expects to rank among the top domestic manufacturers of transformers by revenue. The company serves customers in the power transmission, renewable energy, railway and distribution industries.

Kanohar had obtained short circuit test certification for its 500 MVA 400 kV transformers, making it one of just five companies in India with this certification for the transmission market.

Nuvama Wealth Management and IIFL Capital Services are the leading bookrunners for the Kanohar IPO and MUFG Intime India will serve as the registrar.

Madhur Iron & Steel Targets B2B Expansion

The IPO of Madhur does not include any offers for sale. They manufacture and trade mild steel sections, channels, rods, and angles.

Madhur uses a B2B order-based business model, focusing on serving institutional customers. Merchant banking functions are provided by Share India Capital Services, and registrar functions are provided by Bigshare Services.

Steel products are in demand in the infrastructure and construction industries.

Pipeline Context and Timing

Approximately 200 filings have yet to receive approval or clearance by SEBI. Recent corrections in the equity markets have delayed many issuers, so they have been careful about the timing of their entry into the market.
Both Madhur and Kanohar have chosen to launch at a time of increased focus on the power and infrastructure sectors. In both cases, pricing and roadshows will occur after the completion of the regulatory review process.
Both are dependent on the stabilisation of the market and, in the case of Kanohar, the successful completion of the Transformer Certification process, for the best possible valuations of their listings.

A revival of primary market activity will depend on the completion of stabilisation of the secondary market. Both Madhur and Kanohar indicate that their growth in manufacturing capacity is part of the cycle of capital expenditure.