Kanohar Electricals stock zooms 24% above IPO price on listing day
Analysts expect some profit booking may occur, with a stop loss of ₹650
Kanohar Electricals shares soared 24 percent above their IPO price on the day of their listing, marking a successful debut on Wednesday. The company's shares were initially listed at ₹685.50 on the NSE, a 8.4 percent premium over the IPO price of ₹632. Subsequently, the shares climbed to a high of ₹783.95 on the BSE, surpassing the offer price by 24 percent.
Kanohar Electricals Limited, a manufacturer of transformers in India, serves various industries including power transmission, railways, renewable energy, and power distribution. Shivani Nyati, Head of Wealth at Swastika Investmart Ltd, praised the company's strong fundamentals, such as a robust 42% return on equity (ROE), 70% return on capital employed (ROCE), low debt-to-equity ratio of 0.10x, and a large order book of ₹1,818 crore.
Despite a softer-than-expected listing, Nyati anticipates some profit booking, suggesting a stop loss at ₹650. The company's ₹1,056 crore IPO was subscribed 90.59 times overall, with QIB investors showing a remarkable 215.37 times subscription and non-institutional investors subscribing 87.74 times. The retail investors' portion enjoyed a 20.51 times subscription rate.
Kanohar Electricals had set a price band of ₹601-632 per share for their IPO. The fresh issue of shares valued up to ₹300 crore and an offer-for-sale of up to 1.2 crore shares were priced within the higher end of the band. Promoter K Sons Family Trust utilized the IPO proceeds, raising ₹317 crore from anchor investors. The company intends to allocate ₹64.1 crore towards capital expenditures, including machinery and equipment for their Gangol manufacturing facility, expanding backward integration, office development, and sustainability initiatives.
An additional ₹155 crore will cover increased working capital requirements, with the remaining funds designated for general corporate purposes.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
