Shri Kanha Stainless IPO Overview
Precision stainless steel cold-rolled strips manufacturer raising ₹46.28 cr via 100% fresh issue of 51.42L shares. Fixed price: ₹90. Lot: 1,600 shares (₹2.88L min, 3,200).
Funds for 4-Hi AGC rolling machine China (₹12 cr), debt repayment (₹18 cr), working capital (₹7 cr). Founded July 2015, 10 years old. Sikar, Rajasthan facility, 14,000 MTPA capacity, 80 employees. Products: 200/300/400 series coils, circles, sheets, 0.08-2mm thickness.
Industries: Textile, automotive, chemical, electrical
Lead: Kreo Capital. Analyst: “Aggressively priced”. Revenue dip FY24, explosive PAT jump, fragmented market, blade steel niche. Competes with Jindal Stainless, ASS International, Uttam Galva.
IPO DETAILED INFORMATION
Issue Details
| Parameter | Details |
| IPO Type | SME |
| IPO Open Date | 3 December 2025 (Tuesday) |
| IPO Close Date | 5 December 2025 (Thursday) |
| Allotment Date | 8 December 2025 (Sunday) – Expected |
| Credit to Demat | 9 December 2025 (Monday) – Expected |
| Refund Initiation | TBD |
| Listing Date | 10 December 2025 (Tuesday) – Tentative |
| Price | ₹90 per share (Fixed Price Issue – No price band) |
| Face Value | ₹10 per share |
| Lot Size | 1,600 shares |
| Min Investment (Retail) | ₹2,88,000 (3,200 shares / 2 lots) |
| sHNI Investment | ₹4,32,000 (4,800 shares / 3 lots) minimum |
| Issue Size | ₹46.28 crore total |
| Fresh Issue | ₹46.28 crore (100% fresh issue) – 51,42,400 shares |
| Offer for Sale (OFS) | NIL |
| Total Shares Offered | 51,42,400 equity shares (51.42 lakh) |
| Listing | NSE SME (Emerge Platform) |
| Post-Issue Market Cap | ~₹126 crore (at issue price) |
| P/E Ratio | ~20x (FY25 basis – Aggressive!) |
| EPS | ~₹4.50 (estimated post-issue) |
| ROE | 47.61% (FY25) – Excellent! |
| RoNW | 47.61% (FY25) – Very strong! |
Issue Break-up
| Category | Allocation | Shares |
| QIB (Qualified Institutional Buyers) | 0 shares | 0% (Fixed Price Issue) |
| NII (Non-Institutional Investors) | 24,41,600 shares | 47.48% (50% allocation) |
| Retail Individual Investors | 24,41,600 shares | 47.48% (50% allocation) |
| Market Maker (Giriraj Stock Broking) | 2,59,200 shares | 5.04% |
Note: Fixed Price Issue with 0% QIB allocation. 50-50 split between NII and Retail (standard for fixed price SME IPOs). No anchor portion.
Objects of the Issue (Fund Utilization)
Fresh Issue Proceeds (₹46.28 crore gross / ~₹37.90 cr net after issue expenses ₹8.38 cr) will be used for:
- Installation of 1150 mm 4-Hi AGC Reversible Rolling Machine (Imported from China) – ₹12.00 crore (31.7%)
- Major strategic capex for premium blade steel segment
- 4-Hi (4-High) AGC (Automatic Gauge Control) Reversible Rolling Machine
- Imported from China with advanced technology
- Already paid ₹1.98 crore advance (disclosed in July 2025 DRHP)
- Capacity expansion by 2.5 times from current 14,000 MTPA
- Positions company among niche set of Indian manufacturers with such capabilities
- Enables entry into premium shaving blade steel market currently dominated by Jindal Stainless
- Repayment and/or Prepayment of Secured and Unsecured Borrowings – ₹18.00 crore (47.5%)
- Largest allocation – indicates high leverage
- Repaying loans from banks and financial institutions
- Deleveraging balance sheet
- Reducing finance costs
- Funding Long-Term Working Capital Requirements – ₹7.00 crore (18.5%)
- Raw material procurement (stainless steel coils, scrap)
- Inventory management
- Trade receivables
- General Corporate Purposes – ₹0.90 crore (2.4%)
- Strategic initiatives, contingencies
Strategic Focus:
- Niche expansion: 31.7% for 4-Hi AGC machine to enter premium blade steel segment
- Heavy debt repayment: 47.5% indicates over-leverage requiring deleveraging
- Working capital (18.5%) for growing operations
- Clear focus on capacity expansion (2.5x) and financial strengthening
Note: This is a 100% fresh issue with no OFS. All proceeds go to the company.
Lead Managers & Registrar
Book Running Lead Manager (BRLM):
- Kreo Capital Private Limited
- Address: 2nd Floor, VCA Complex, Near Gate No. 08, Civil Lines, Sadar Bazar, Nagpur – 440001, Maharashtra
- Phone: 0712-2997550 / 0712-2997551
- Website: www.kreocapital.com
Registrar:
- MAS Services Limited
- Address: T-34, 2nd Floor, Okhla Industrial Area, Phase-II, New Delhi – 110020
- Phone: 011-26387281-83, 011-41320335
- Website: www.masserv.com
Market Maker:
- Giriraj Stock Broking Private Limited
Promoters & Management
Key Promoters – Agarwal Family (4 Promoters):
- Mr. Jai Bhagwan Agarwal (Age 60) – Chairman & Managing Director
- Founder of the company and Navbharat Tubes Pvt. Ltd.
- 30+ years of experience in stainless steel industry
- Central to establishing Shri Kanha Stainless as quality-focused brand
- Mr. Shashank Agrawal (Age 36) – Whole-Time Director & Promoter
- Planning & Entrepreneurship graduate from IIPM Jaipur
- 13+ years of industry experience
- Oversees commercial operations
- Director in other group entities
- Mrs. Kavita Agarwal (Age 57) – Non-Executive Director & Promoter
- Graduate in Arts from University of Rajasthan
- Associated since incorporation, Director since 2017
- Now Non-Executive Director (since March 2025)
- Contributes to governance and strategic oversight
- Director in Navbharat Tubes Pvt. Ltd.
- Ms. Neha Agarwal – Promoter
- Family member
Company History:
- Incorporated July 10, 2015 as “Kanha Stainless Private Limited” (10 years old)
- Name changed to “Shri Kanha Stainless Private Limited” on October 23, 2017
- Converted to Public Limited on August 30, 2024 as “Shri Kanha Stainless Limited”
- Workforce: 80 permanent employees (as of September 30, 2025)
- Certifications: ISO 9001:2015, ISI 15997:2012, IS 5522:2014, IS 6911:2017
- Order Book: ₹12.73 crore (₹1,273.49 lakh) as of November 25, 2025
Company Contact:
- Registered Office: Plot No. 70-B, Unit No. 401-402, 4th Floor, Trimurty Prime Tower, Nirwaroo Road, Jhotwara, Jaipur – 302 012, Rajasthan
- Manufacturing Facility: Sikar, Rajasthan (14,000 MTPA capacity)
- Phone: +91 925 704 3976
- Email: [email protected]
- Website: www.kanhastainless.com
- Company Secretary & Compliance Officer: Arzoo Mantri
- CIN: U27109RJ2015PLC047890
COMPANY OVERVIEW
Establishment & Background:
- Incorporated on July 10, 2015 (10 years old)
- Industry: Stainless Steel Manufacturing – Precision Cold-Rolled Strips
- Headquartered in Jaipur, Rajasthan (Registered Office)
- Manufacturing: Sikar, Rajasthan (Production facility)
- Workforce: 80 permanent employees (September 30, 2025)
- Founder: Jai Bhagwan Agarwal (60, Chairman & MD) with 30+ years stainless steel experience
Business Model:
- Precision Manufacturer of Cold-Rolled Stainless Steel Strips, Circles, and Sheets
- Product Range:
- Stainless Steel Coils: AISI 200 series, 300 series, 400 series
- Thickness Range: 0.08 mm to 2.00 mm (ultra-thin to thin strips)
- Width: Up to 750 mm
- Slitting: 5 mm and above
- Temper: Both hard and soft tempers based on customer requirements
- Forms: Coils, circles, sheets
- Target Industries (Diverse End-Use Applications):
- Textile Industry: Textile machinery components
- Automotive Industry: Automotive components, springs, heat exchangers
- Chemical Industry: Chemical processing equipment
- Electrical Equipment: Electrical components, switchgear
- Flexible & Capillary Tubes: Precision tubing for various applications
- Clocks & Watches: Watch components, precision parts
- Surgical Instruments: Medical devices
- Consumer Goods: Various consumer products
- Future Focus: Premium shaving blade steel segment (post 4-Hi AGC machine installation)
- Manufacturing Infrastructure:
- Installed Capacity: 14,000 MTPA (metric tons per annum)
- Location: Sikar, Rajasthan
- Key Equipment:
- 20-Hi Rolling Mill with Automatic Gauge Control (AGC) – delivers superior tolerance and surface finish
- Bright annealing lines
- Deburring and polishing units
- Multiple slitting and cutting lines
- New Investment (IPO funded): 1150 mm 4-Hi AGC Reversible Rolling Machine from China (₹12 cr) – 2.5x capacity expansion
- Sustainable Operations: Scrap recycling for environmental responsibility
- Revenue Model:
- Direct sales to industrial customers (B2B)
- Customized products based on client specifications
- Domestic sales (primary) + niche export markets
- Revenue driven by consistent demand for high-quality precision stainless steel strips
Market Position:
- Positioned as precision cold-rolled stainless steel strips manufacturer in India’s specialty steel market
- Indian stainless steel market: ₹60,000+ crore industry growing at 7-9% CAGR
- Competing in fragmented segment with national giants and regional players
- Key Competitors: Jindal Stainless (₹40,000+ cr market cap), ASS International, Uttam Galva Steels, Adhunik Metaliks
- Niche player focusing on ultra-thin precision strips (0.08-2mm thickness)
- Future Strategy: Enter premium blade steel segment with 4-Hi AGC machine – niche space dominated by Jindal
- ISO 9001:2015 and multiple ISI certifications provide quality credibility
- Strong order book of ₹12.73 crore (November 25, 2025) demonstrates demand
Operations:
- Registered Office: Jaipur, Rajasthan (Trimurty Prime Tower, Jhotwara)
- Manufacturing Facility: Sikar, Rajasthan (14,000 MTPA capacity)
- Workforce: 80 permanent employees
- Technology: 20-Hi Rolling Mill with AGC, bright annealing, deburring, polishing, slitting
- Certifications: ISO 9001:2015, ISI 15997:2012, IS 5522:2014, IS 6911:2017
- Quality: Precision tolerance and superior surface finish
- Sustainability: Scrap recycling operations
Company Strengths
- Explosive Profit Growth – Revenue +12%, PAT +122%! (FY24 to FY25):
- FY25 revenue: ₹146.39 cr (+11.7% vs ₹131.00 cr FY24)
- FY25 PAT: ₹5.79 cr (+122.7% vs ₹2.60 cr FY24) – more than doubled!
- PAT margin expansion: 1.98% (FY24) → 3.96% (FY25) – doubling of profitability
- Demonstrates operational leverage and efficiency improvements
- Consistent revenue growth with accelerating profitability
- Excellent Return Ratios – ROE 47.61%, RoNW 47.61%:
- ROE: 47.61% (FY25) – exceptional return on equity
- RoNW: 47.61% (FY25) – very strong return on net worth
- Both metrics significantly above industry averages
- Indicates efficient capital allocation and high profitability
- Attractive for investors seeking high returns
- Strategic Capacity Expansion – 2.5x Growth with 4-Hi AGC Machine:
- IPO proceeds (₹12 cr or 31.7%) funding 1150 mm 4-Hi AGC Reversible Rolling Machine from China
- Capacity expansion by 2.5 times from current 14,000 MTPA (to ~35,000 MTPA potential)
- Advanced technology positioning company among niche set of Indian manufacturers
- Enables entry into premium shaving blade steel segment currently dominated by Jindal Stainless
- Advance payment of ₹1.98 crore already made (serious commitment)
- Clear growth trajectory and scalability
- Strong Order Book – ₹12.73 Cr as of Nov 25, 2025:
- Robust order book of ₹12.73 crore (₹1,273.49 lakh) as of November 25, 2025
- Demonstrates strong demand and established customer base
- Provides revenue visibility for next 3-6 months
- Validates product quality and market acceptance
- 10-Year Operating History & Quality Certifications:
- Incorporated July 2015 (10 years of operations)
- Survived economic cycles and industry challenges
- Certifications: ISO 9001:2015, ISI 15997:2012, IS 5522:2014, IS 6911:2017
- Multiple certifications build customer trust
- Quality-centric approach recognized in industry
- Track record provides credibility vs newly incorporated entities
- Diversified End-Use Applications – Multiple Industry Exposure:
- Products serve 10+ industries: Textile, automotive, chemical, electrical, tubes, clocks/watches, surgical instruments, consumer goods
- Reduces dependency on single industry vertical
- Cyclicality of one sector offset by growth in others
- Cross-industry presence provides resilience
- Experienced Promoter – 30+ Years in Stainless Steel:
- Jai Bhagwan Agarwal (Chairman & MD) has 30+ years in stainless steel industry
- Founded Shri Kanha Stainless and Navbharat Tubes Pvt. Ltd.
- Deep industry relationships and technical expertise
- Established reputation and credibility
- Second-generation leadership (Shashank Agrawal, 13+ years experience) ensuring continuity
- Modest GMP (₹10) – 11% Expected Listing Gains:
- GMP of ₹10 as of Nov 30-Dec 2 (11.1% premium)
- Expected listing price: ₹100
- Positive grey market sentiment
- Potential for 11% Day 1 listing gains
- Subject to Sauda: ₹9,500 per application
- 100% Fresh Issue – All Proceeds for Growth (No Promoter Exit):
- Entire ₹46.28 cr goes to company
- No OFS component signals promoter confidence
- Capital for genuine capacity expansion (₹12 cr) and deleveraging (₹18 cr)
- Promoters committed to long-term value creation
Key Risks & Challenges
- “Aggressively Priced” – Analyst Dilip Davda Warning:
- Critical Warning: Analyst Dilip Davda states issue is “aggressively priced“
- P/E of ~20x for steel manufacturing SME – high valuation
- Steel companies typically trade at 5-15x P/E due to cyclicality
- Comparable Jindal Stainless trades at ~15x despite 100x larger scale
- Recommendation: “Well-informed/cash surplus investors may park moderate funds for medium term” – cautious stance
- Limited margin of safety at current pricing
- Explosive PAT Jump +122% – “Raises Eyebrows” Sustainability Concern:
- Analyst Dilip Davda explicitly notes: “Surge in net profits for FY25 and H1-FY26 raises eyebrows“
- PAT surged from ₹2.60 cr (FY24) to ₹5.79 cr (FY25) – more than doubled in one year!
- PAT margin: 1.98% (FY24) → 3.96% (FY25) – rapid expansion
- Such dramatic profit jumps in SME IPOs often indicate pre-IPO earnings inflation
- Questions: Can 3.96% PAT margins sustain in commodity steel business known for thin margins?
- Operating in fragmented, competitive segment with pricing pressure
- Risk of profit normalization post-listing
- Revenue Setback FY24 – “Surprising” Despite Higher Profits:
- Analyst notes: “The company posted setback in its top line for FY24, but posted higher net profits, that is surprising“
- FY24 revenue: ₹131.00 cr vs FY23: ₹143.89 cr – revenue actually declined 9%!
- Yet FY24 PAT increased – indicates either cost cutting or accounting adjustments
- Revenue volatility concerning – FY23 ₹143.89 cr → FY24 ₹131 cr (↓9%) → FY25 ₹146.39 cr (↑12%)
- Inconsistent top-line growth despite “strong order book”
- Questions about business stability and demand consistency
- Heavy Debt Burden – 47.5% of IPO for Debt Repayment:
- ₹18.00 crore (47.5% of net proceeds – largest allocation) for debt repayment
- Indicates significant over-leverage requiring deleveraging
- Outstanding borrowings substantial enough to consume half of IPO
- Even post-IPO, likely considerable debt remains (₹18 cr is only partial repayment)
- Finance costs impacting profitability
- Continuous servicing burden
- “Highly Competitive and Fragmented Segment” – Analyst Warning:
- Analyst Dilip Davda explicitly warns: Operating in “highly competitive and fragmented segment“
- Competing with giants:
- Jindal Stainless: ₹40,000+ cr market cap, largest stainless steel producer in India
- ASS International, Uttam Galva Steels, Adhunik Metaliks: Established players
- Plus hundreds of regional cold rolling mills
- Commodity-like business with limited differentiation
- Price-based competition eroding margins
- Customer bargaining power high
- Difficult to sustain premium pricing
- Single Manufacturing Facility – Concentration Risk:
- All production from single facility in Sikar, Rajasthan
- No geographic diversification or backup facility
- Vulnerable to:
- Natural disasters, fire, equipment breakdown
- Labor disputes, regulatory shutdowns
- Power outages (steel manufacturing is energy-intensive)
- Any disruption = complete production halt
- Business continuity risk
- ₹12.73 cr order book at risk if facility down
- Raw Material Price Volatility – Stainless Steel Coil Dependency:
- Cold rolling business procures stainless steel coils as raw material
- Subject to global stainless steel prices (nickel, chromium, iron ore fluctuations)
- Limited pricing power to pass on cost increases due to competition
- Margin compression risk during raw material inflation
- No long-term hedging or supply contracts mentioned
- Currency risk on imported raw materials
- Limited Export Presence – Domestic Market Concentration:
- Revenue primarily from domestic sales
- “Niche export markets” mentioned but minimal contribution
- No significant international diversification
- Dependent on Indian economic growth and industrial demand
- Global expansion requires significant investment
- Blade Steel Segment Entry Highly Competitive:
- IPO proceeds (₹12 cr) for 4-Hi AGC machine to enter blade steel segment
- Blade steel market dominated by Jindal Stainless with established relationships with Gillette, P&G, etc.
- Very high quality and consistency requirements
- Long qualification periods for new suppliers
- No guaranteed customers in blade steel segment mentioned
- Risk of ₹12 cr capex not generating expected returns
- Working Capital Intensity – 18.5% of IPO:
- ₹7.00 crore (18.5% of net proceeds) allocated to working capital
- Steel business inherently working capital intensive
- Raw material inventory, receivables from industrial customers
- Cash flow strain typical in commodity manufacturing
- May require continuous liquidity infusion
- Small Scale vs Giants – 80 Employees, ₹146 Cr Revenue:
- Workforce: Just 80 employees
- Revenue: ₹146.39 cr (FY25) vs Jindal Stainless ₹40,000+ cr
- Limited organizational bandwidth
- Cannot match R&D, marketing, customer service of large players
- Vulnerable to pricing pressure from larger competitors
- Difficulty winning large institutional contracts
- Cyclical Industry – Steel Manufacturing Vulnerability:
- Stainless steel industry is highly cyclical
- Linked to construction, automotive, industrial manufacturing cycles
- Economic slowdowns = immediate demand impact
- Government policies (import duties, anti-dumping) create uncertainty
- Cannot sustain high margins during downturns
CRITICAL CONCERNS: Analyst Dilip Davda explicitly warns issue is “aggressively priced” and “surge in net profits for FY25 and H1-FY26 raises eyebrows” regarding sustainability. Notes company “posted setback in its top line for FY24, but posted higher net profits, that is surprising.” Operating in “highly competitive and fragmented segment.” Revenue declined 9% in FY24 (₹143.89 cr → ₹131 cr) yet PAT increased. FY25 PAT +122% (₹2.60 cr → ₹5.79 cr) raises pre-IPO inflation concerns. Heavy debt (₹18 cr or 47.5% for repayment). P/E ~20x aggressive for steel SME.
POSITIVES: Excellent ROE 47.61%, strategic 2.5x capacity expansion with 4-Hi AGC machine (₹12 cr), ₹12.73 cr order book, 10-year history, ISO certifications, GMP ₹10 (11%). Recommendation: “Well-informed/cash surplus investors may park moderate funds for medium term.”
Disclaimer: This information is based on publicly available sources including SEBI RHP filings, analyst reports, and company disclosures. Investors should conduct their own research and consult with financial advisors before making investment decisions. Past performance is not indicative of future results. SME investments carry higher risks than mainboard listings.
