KSH International IPO: Magnet Winding Wire Export Leader Riding Power, Rail & EV Electrification – Should You Subscribe?

At a Glance Table

Company and its Business Operations

KSH International Limited, originally incorporated in 1979, manufactures insulated copper and aluminium conductors and magnet winding wires under the “KSH” brand. Operations began in 1981 with a Taloja plant and have scaled to four manufacturing facilities across Taloja, two units at Chakan, and a new Supa plant in Maharashtra with 29,045 MTPA installed capacity as of March 31, 2025. The company produces round enamelled wires, paper-insulated rectangular conductors, continuously transposed conductors (CTC) and bunched paper‑insulated copper wires for Transformers, motors, generators and EV traction applications. KSH supplies primarily to OEMs across power, renewables, Railways, automotive, industrials and appliances, exporting to 24 countries and serving 122 customers in FY25 with high repeat business. It is the third‑largest magnet winding wire manufacturer by capacity and the largest exporter from India, and is part of the diversified KSH Group.

Industry Outlook

The Indian magnet winding wire market benefits from structural demand in power transmission, renewables, railways, industrial motors, EVs and data centres, where wires and conductors are critical inputs for transformers, generators and high‑efficiency motors. According to the CARE Report, India’s magnet winding wire market was estimated at Rs 11, 800 crore in FY25 and is projected to grow at around 11–13 per cent CAGR over FY25–30, driven by grid capex, renewable additions, railway electrification and rising EV penetration; the global market is expected to grow at around 5–6 per cent annually over the same period. India’s low per‑capita power consumption, planned transmission investments and the “China Plus One” sourcing shift position domestic players such as KSH to capture both domestic and export opportunities over the medium term.​

Objects of the Issue

• Repayment and prepayment of certain company borrowings – Rs 225.98 crore.​
• Purchase and set‑up of new machinery at existing plants – Rs 90.06 crore.​
• Purchase and set‑up of rooftop Solar power plant at Supa facility – Rs 10.41 crore.​
• General corporate purposes – balance proceeds from fresh issue.​

(Totals relate to Rs 420 crore fresh issue; OFS of Rs 290 crore goes to selling shareholders.)​

SWOT Analysis

Strengths

• India’s 3rd-largest magnet winding wire maker with 29,045 MTPA capacity and the largest exporter, serving power, renewables, railways, automotive and industrial OEMs.
• Broad product portfolio (round/rectangular wires, CTC, paper-insulated conductors), catering to multiple high-growth end-use industries including EVs, transformers and motors.
• Strategically located plants across Taloja, Chakan and Supa, enabling automation-led efficiency and low Logistics cost due to proximity to JNPT port.
• Highly diversified, sticky customer base—122 customers in FY25 with ~94.5 per cent revenue from repeat clients, including global leaders like Toshiba and Meidensha.
• Long customer relationships—Half of the top 10 customers associated for over 10 years, supporting stable recurring demand.

Risk Factors

• High customer concentration: Top 10 clients contribute 52–60 per cent of revenue, making demand shifts a key sensitivity.
• Supplier dependence: Top 10 suppliers account for 97–99 per cent of raw material sourcing, with no long-term contracts, exposing the company to supply disruptions.
• Copper & aluminium price volatility: Raw material fluctuations may not always be fully passed through, impacting margins.
• Sector concentration risk: ~72–79 per cent revenue from the power sector, making earnings vulnerable to cyclical slowdowns in power capex or policy changes.

Financial Performance Tables (Figure in Rs crore) (Source – Company RHP)

1. Profit & Loss

 (b) Balance Sheet

(c) Operating Cash Flow

Peer Comparison

The RHP benchmarks KSH primarily against Indian magnet winding wire manufacturers such as Precision Wires India and Ram Ratna Wires, plus certain diversified wire and cable players; valuation ratios below use FY25 numbers and the IPO’s upper price band, assuming post‑issue equity.

Outlook & Relative Valuation

KSH continues to sharpen its product mix toward high-value specialised magnet wires such as CTC, which offer a superior margin profile compared to standard winding wires. The company enjoys strong entry barriers, supported by approvals from PGCIL, NTPC, NPCIL, and RDSO for supplying CTC and insulated rectangular conductors used in HVDC and 765 kV systems. These certifications reinforce its competitive moat and strengthen long-term business visibility.

KSH is also well positioned to benefit from the global “China Plus One” sourcing diversification. Efficiency initiatives—including a 3.2 MW rooftop solar plant and backward integration into upcast copper rod manufacturing—are expected to reduce power costs, improve raw material stability, and support sustainability objectives.

The company stands as a direct beneficiary of India’s multi-year investment cycle in power grid expansion, renewable energy, rail electrification, industrial automation, and EV adoption—all of which require transformers and high-efficiency motors that consume magnet winding wires and CTC conductors. Ongoing expansion at the Supa plant and capex in higher-value HVDC/CTC products should support margin improvement and reduce energy/raw material volatility over the medium term.

At the upper price band of Rs 384, the IPO values KSH at a post-issue P/E of ~38.3x FY25 EPS and EV/EBITDA of ~24x. Leverage remains elevated at 1.17x D/E, although the proposed debt repayment from IPO proceeds should materially reduce indebtedness.

Key risks include high working capital intensity, copper and aluminium price volatility, execution of expansion plans, and Reliance on the capex cycles of the power and industrial sectors. While the company enjoys strong sectoral tailwinds, current valuation offers limited margin of safety should growth moderate.

Recommendation

We recommend an Avoid for Now stance and prefer to monitor the company’s execution post listing. Based on Q1FY26 EBITDA per tonne of Rs 65,000 and ~85 per cent utilisation on the 29,045 MTPA capacity, forward EV/EBITDA normalises to ~18x, which is more reasonable—especially as deleveraging from IPO proceeds may lift profitability through interest savings.

However, negative operating cash flow for the past two fiscal years raises concerns around execution and working-capital management, especially when peers continue to generate healthy operating cash flows. This weakens the investment case despite strong industry tailwinds.

Given fair-to-premium valuation versus peers, we expect muted listing gains. Long-term investors should avoid for now and track improvements in operational execution and cash flow generation. A sustained turnaround in operating cash flow would provide a more attractive and validated entry point.