KSH International Limited IPO

A) Business Overview

KSH International Limited is a leading manufacturer of magnet winding wires in India. As of Fiscal 2025, it is the third-largest manufacturer of magnet winding wires in the country by production capacity and the largest exporter of these products from India by export revenue. The company commenced operations in 1981 and has diversified its portfolio to provide customized solutions for various industries.

Key Products: The company manufactures a comprehensive suite of products divided into two primary categories:

1. Specialized Magnet Winding Wires: This includes Continuously Transposed Conductors (CTC), paper-insulated rectangular copper/aluminium wires, and rectangular enamelled copper/aluminium wires.

2. Standard Magnet Winding Wires: This includes round enamelled copper and aluminium magnet winding wires.

End-Use Industries: Their products serve as critical components for capital goods such as transformers, motors, alternators, and generators. These are used in sectors including Power (Generation, Transmission, and Distribution), Renewables, Industrials, Railways, Automotive (EV and ICE), and Consumer Durables,.

Manufacturing Footprint: As of June 30, 2025, the company operates three manufacturing facilities in Maharashtra (two in Chakan, Pune, and one in Taloja, Raigad) with a combined annual installed capacity of 29,045 MT. A fourth facility in Supa, Ahilyanagar, commenced Phase I operations in September 2025.

B) Revenue Streams and Financial Analysis

For the fiscal year ended March 31, 2025, the company reported a total revenue from operations of ₹19,282.93 million. For the three-month period ended June 30, 2025, revenue from operations was ₹5,587.12 million.

Revenue Breakdown by Product Segment (Fiscal 2025):

1. Specialized Magnet Winding Wires: This is the dominant revenue driver, contributing 74.79% of operating revenue (₹13,502.66 million).

2. Standard Magnet Winding Wires: This segment contributed 25.21% of operating revenue (₹4,550.79 million).

Revenue Breakdown by End-User Industry (Fiscal 2025):

1. Power Sector: A significant majority of revenue, 74.79%, is derived from the power generation, transmission, and distribution industry.

2. Others: The remaining 25.21% comes from sectors such as industrials, automotive (EV/ICE), home appliances, and railways.

Geographic Breakdown (Fiscal 2025):

• Domestic Sales: 67.30% of revenue from operations.

• Exports: 32.70% of revenue from operations, with exports to 24 countries including the USA, UAE, and Germany,.

C) Key Risk Factors

The following critical risks have been identified in the RHP:

1. Customer Concentration: The company relies heavily on a limited number of customers. The top 10 customers contributed 53.97% of revenue for the three months ended June 30, 2025, and 52.54% for Fiscal 2025. Loss of any key customer could adversely affect business.

2. Supplier Dependence: The business depends on suppliers for raw materials like copper and aluminium. The top 10 suppliers contributed 98.91% of total raw material costs for the period ended June 30, 2025. The company typically does not have long-term agreements with these suppliers.

3. Raw Material Price Volatility: The business is sensitive to fluctuations in the prices of primary raw materials (copper and aluminium). Any inability to pass on increased costs to customers could impact profitability.

4. Sectoral Concentration: A significant portion of revenue (71.73% for the period ended June 30, 2025) is attributable to the Power Sector. Economic cyclicality or negative trends in this specific sector could severely impact the company.

5. Product Concentration: More than 70% of revenue is derived from Specialized Magnet Winding Wires. A reduction in demand for this specific product category would materially affect the business.

6. Geographic Concentration: All manufacturing facilities are located in a single state, Maharashtra. This exposes the company to regional risks such as political instability or natural disasters in that area.

7. Negative Cash Flows: The company has experienced negative cash flows from operating activities in the past (e.g., Fiscal 2025 and Fiscal 2024), which could impact its ability to operate or grow.

8. Outstanding Litigation: The company, its Directors, and Promoters are involved in certain legal proceedings. Adverse outcomes could affect the company's reputation and financials.

D) Objects of the Issue (Use of Proceeds)

• Total Offer Size: Up to ₹7,100.00 million.

• Fresh Issue Component: Up to ₹4,200.00 million.

• Offer for Sale Component: Up to ₹2,900.00 million.

Use of Net Proceeds from Fresh Issue: The company proposes to utilize the Net Proceeds from the Fresh Issue for the following specific purposes:

1. Repayment of Borrowings: An estimated ₹2,259.77 million will be used for the prepayment or repayment, in full or in part, of certain outstanding borrowings availed by the company.

2. Capital Expenditure (Machinery): Approximately ₹870.17 million is allocated for purchasing and setting up new machinery for:

• Expansion at the Supa Facility (Phase II Expansion).
• Unit 2 in Chakan, Pune,.

3. Capital Expenditure (Solar Plant): An estimated ₹88.28 million will be utilized for purchasing and setting up a rooftop solar power plant for power generation at the Supa Facility,.

4. General Corporate Purposes: The remaining balance will be used for general corporate purposes.