KSH International IPO subscribed 15% on Day 1, GMP remains flat: Here's why analysts recommend 'Subscribe'

The initial public offering of KSH International opened for public bidding today, December 16. The Rs 710-crore maiden issue of the company has been subscribed 15 percent on Day 1.

The IPO received bids for over 19.94 lakh shares, as against an offer size of 1.36 crore shares, according to data on NSE. Retail investors have subscribed 27 percent of their reserved portion, while Non Institutional Investors (NII) have booked 6 percent of their allotted quota. Qualified Institutional Buyers (QIB) are yet to make any substantial bid for the IPO.

KSH International IPO GMP:

Ahead of listing, the unlisted shares of KSH International were trading flat at the IPO price with zero grey market premium (GMP), according to data on Investorgain and IPO Watch.

While the muted GMP indicated a muted listing for the company, it is worthy to note that grey market is an unofficial platform, and the estimates may significantly vary from the actual market debut.

About KSH International IPO:

KSH International, which claims to be the third-largest manufacturer of magnet winding wires in India, launched its maiden public issue to raise Rs 710 crore through a fresh issue of shares worth Rs 420 crore and an offer for sale (OFS) of shares worth Rs 290 crore at a price band of Rs 365-384 per share.

The IPO which opened for public bidding today, will close on December 18. The allotments will likely be finalized by December 19, and the shares are scheduled to be listed on stock exchanges BSE and NSE on December 23.

KSH International IPO anchor book:

A day before the IPO opened for public bidding, the Pune-based company said that it has mobilised Rs 213 crore from 10 anchor investors on December 15. Out of the total allocation, 41.4 lakh equity shares were allocated to 5 domestic mutual funds including Kotak Mahindra AMC, HDFC AMC, LIC Mutual Fund, and ITI Mutual Fund," the company in its filing to exchanges said.

Further, 4.68 lakh shares were allocated to two insurance companies - Kotak Mahindra Life Insurance, and Edelweiss Life Insurance Company.

How will the IPO proceeds be used?

KSH International intends to use Rs 226 crore of the fresh issue proceeds for repayment of certain borrowings, and Rs 8.8 crore for purchase and setting up of a rooftop solar power plant for power generation at Supa facility.

Another Rs 87 crore will be used for the purchase and setting up of new machinery for expansion at Supa facility, and new machinery at Unit 2 in Chakan, Pune. The remainder funds will be used for general corporate purposes.

Should you subscribe?

KSH International is directly linked to India's long term power, renewable energy and EV growth cycle, said Abhinav Tiwari, Research Analyst at Bonanza, while explaining why they hold a positive view on the IPO.

The analyst noted that the company has delivered very strong financial performance, with rapid revenue growth and strong profit rise due to better capacity utilization, a shift toward higher margin products, and strong operating leverage. "In FY25 alone, profit grew much faster than revenue, showing that the business is scaling efficiently. Despite this high growth, valuations remain reasonable," he said.

"KSH offers strong growth visibility, improving profitability, and a fairly valued which makes the IPO a good pick for investors," he added.

Angel One advised investors to 'Subscribe' to the issue with a medium to long-term view. "At the upper price band of ₹384, the IPO values the company at a post-issue P/E of 28.68x, indicating that the issue is fairly priced. However, strong earnings growth, improving return ratios, leadership in the magnet winding wires segment, and favourable demand tailwinds from power, renewables, EVs and industrial applications provide healthy long-term visibility," the domestic brokerage said.