Shri Kanha Stainless Limited company is a manufacturer of precision stainless steel cold rolled strips, offering a wide range of thin and ultra-thin variants designed to meet diverse industrial requirements. The company’s products are widely used across various sectors including the textile, automotive, chemical industries, as well as in flexible tubes, capillary tubes, clocks, watches, and electrical equipment. The company manufactures coils in the 200, 300, and 400 stainless steel series, with thicknesses ranging from 0.08 mm to 2.00 mm, and offers slitting from 5mm and above in hard or soft form based on customer requirements. The plant has a production capacity of 14,000 MTPA. The Company has undertaken key initiatives to expand its production capabilities and improve its product offering. In line with this objective, the Company has finalized a deal to import and install an 1150 mm 4-Hi AGC Reversible Rolling Machine from China. An advance payment of Rs 198.35 Lakhs has already been made toward the procurement of this machinery. This installation is expected to significantly enhance the Company’s capacity utilization, increasing production capacity by 2.5 times compared to the current level and improve its product offering thereby contributing to stronger financial performance and profitability. As per financial performance, Shri Kanha Stainless Limited has posted total income / net profits of Rs 136.47 Cr / 0.72 Cr (FY23), Rs 130.99 Cr / Rs 2.60 Cr (FY24), Rs 146.38 Cr / 5.79 Cr (FY25) and Rs 110.30 Cr / 4.25 (upto Q2FY26). So as per previous financials data, company has shown average results. But increase in net-profit just before IPO raises doubts. Also trade receivables for FY25 is around 36% of total revenue and short & long term borrowings are around Rs 50 Cr. Company has an average EPS of Rs 3.72 and average RoNW of 40.61% for last three fiscals. Issue is priced at a P/BV of 2.26 as per NAV of Rs 39.81/- as on post issue. If we attribute latest earnings of FY24, FY25 and annualised FY26 on equity post issue, then asking price is at a P/E of around 53.88, 24.22 and 16.47 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Kreo Capital Private Limited is associated with this SME IPO, and has handled 2 SME IPOs in last two fiscal years. From last 2 IPOs, all opened below issue price or at par on the day of listing. As of now, from last two IPO, all are trading below issue price. ( As on 29.11.25 ) As per financials, Shri Kanha Stainless Limited has shown average results, RoNW is 47.61% and P/E is 53.88, 24.22 and 16.47 respectively as per FY24, FY25 and annualised FY26 earnings. So issue looks fully priced. But sudden rise in net-profit just before IPO, higher value of trade receivables (around 36% of FY25 total revenue) and higher short and long term borrowings (around Rs 50 Cr), raises doubts. Company is a manufacturer of precision stainless steel cold rolled strips, which is highly competitive business segment. Performance of BRLM is poor. So, we give AVOID rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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