Kanohar Electricals IPO GMP signals 38% listing gains on Wednesday; analysts outline trading strategy

New business data points to the fact that Market watchers have recommended market participants who received allotment in the Kanohar Electricals IPO to stay invested for the long term, citing multi-year grid capital expenditure and railway electrification demand supporting the firm's business.

Kanohar Electricals shares are set to make their market debut on Wednesday, September 16, with the current grey market trends suggesting a premium stock-exchange debut with up to 38 percent upside.

The Rs 1,056-crore initial public offering (IPO) of Kanohar Electricals was subscribed 90.59 times on the final day of bidding.

The firm is an established transformer manufacturer with more than 40 years of experience, catering to sectors including power transmission, railways, renewable energy and power distribution.

Narendra Solanki, Head-Fundamental Research-Investment Services, Anand Rathi Shares and Stock Brokers, stated the firm has demonstrated firm financial performance, with topline from operations growing at a 53.7 percent CAGR over FY24-FY26, while EBITDA grew at a 141 percent CAGR during the same period.

Its order book stood at Rs 18,183 million as of FY26, providing healthy topline visibility, while its integrated manufacturing capabilities and presence across multiple transformer categories position it to benefit from rising investments in India's transmission, distribution and renewable energy infrastructure, he stated.

The firm offers exposure to the structural expansion in India's power transmission and distribution sector, supported by rising grid investments, renewable energy integration and increasing demand for high-voltage transformers, Solanki stated.

That stated, high customer concentration, dependence on the Transformer Manufacturing Business and government and transmission utility orders warrant a measured valuation outlook, he further noted.

At the upper price range, the firm is valued at 38.6 times FY26 P/E and 28 times FY26 EV/EBITDA, implying a post-offering market capitalisation of Rs 50,046 million.

"Thus, we recommend market participants who received allotment book partial earnings on a premium stock-exchange debut and hold the rest for the long term," Solanki stated.

The IPO received bids for 1,05,92,88,437 shares against 1,16,93,326 shares on offer, according to NSE data.

The portion reserved for qualified institutional buyers (QIBs) was subscribed 215.37 times, while the non-institutional investor category was subscribed 87.74 times. The retail investor portion received 20.51 times subscription.

Sarvam Goes, Founder of Pocketful, stated Kanohar Electricals is a Meerut-based transformer and EPC player riding the grid capex and railway electrification theme.

Topline rose from Rs 457 crore to Rs 663 crore, while earnings nearly doubled to Rs 130 crore in FY26, he stated.

"Marquee domestic mutual funds anchored the offering with real conviction, and the broader market backed that view, with the overall subscription crossing 90 times," Goes stated.

He anticipates the stock to open with a stock-exchange debut-day gain of 30-40 percent over the Rs 632 offering price.

"Market participants who missed allotment should use a correction toward the softer end of that range as an entry point. Those who got shares should stay invested, given the multi-year grid capex and railway electrification demand behind the business," he stated.

Mahesh M Ojha, Vice President, Research & Business Development at Kantilal Chhaganlal Securities, stated the firm's in-house manufacturing and integrated capabilities can backing better quality control, execution efficiency and scalability as demand for transformers increases.

Rising investments in power transmission and distribution, renewable energy integration, railway electrification and grid modernisation are anticipated to drive sustained demand for transformers, he stated.

"That stated, IPO allotted market participants can book partial stock-exchange debut upside and stay invested for the long term. Anticipated stock-exchange debut gain could be 25-27 percent," Ojha stated.