Shri Kanha Stainless IPO

Shri Kanha Stainless is a private sector manufacturer engaged in producing cold-rolled stainless steel sections in India. The company manufactures stainless steel coils and strips in the 200, 300, and 400 series, each with distinct material characteristics suited to various applications. It claims to be positioned to benefit from the growing demand for cold-rolled stainless steel products in the country.

The company claims to have implemented a structured cost control system to monitor and manage input costs continuously. This framework is designed to help the company maintain margins despite rising raw material prices and operational expenses.

Shri Kanha Stainless claims to have a dedicated quality division with experienced personnel and in-house laboratories to test raw materials and finished products. The company states that its manufacturing unit follows defined quality and safety procedures in compliance with regulatory standards. It is accredited with ISO 9001:2015 for its quality management systems and ISI certifications, including IS 15997:2012, IS 5522:2014, and IS 6911:2017.

As of November 25, 2025, the company reported an order book valued at Rs 12.73 crore, with ongoing projects for the supply of cold-rolled stainless steel plate, sheet, and strip. It claims that its technical capabilities, timely delivery, and price competitiveness have helped it secure and maintain long-term customer relationships.

The company has witnessed a consistent increase in its profit after tax (PAT). It increased from Rs 0.72 crore in FY23 to Rs 2.60 crore in FY24 and Rs 5.79 crore in FY25.

The company reported negative cash flow from operating activities amounting to Rs 2.65 crore for the period ended September 30, 2025, and Rs 8.78 crore in FY25. Additionally, negative cash flow from investing activities amounted to Rs 1.62 crore in FY24 and Rs 3.18 crore in FY23. Furthermore, the company reported negative cash flow from financing activities amounting to Rs 7.72 crore in FY25. The company attributes part of the overall shortfall to a technical adjustment following the transition of term loan and working capital facilities from HDFC Bank to Kotak Mahindra Bank. Any sustained negative cash flow in the future could adversely affect the company’s operations, liquidity, and financial condition.

The company, its promoters, and group companies are involved in certain ongoing legal proceedings, including criminal and tax-related disputes. Any adverse judgments in any of these cases could be detrimental to the company’s business prospects.

Shri Kanha Stainless is dependent on third-party suppliers for procuring stainless steel hot rolled (SS HR) coils, which serve as the primary raw material in its manufacturing process. The top three suppliers accounted for Rs 61.89 crore (61.63 percent) of the company’s total purchases for the period ended September 30, 2025; Rs 91.55 crore (64.24 percent) in FY25; Rs 96.74 crore (94.96 percent) in FY24; and Rs 76.63 crore (62.76 percent) in FY23. Any disruption in supply from one or more of these key vendors, price fluctuations, or transportation bottlenecks in the regions where these suppliers operate could adversely affect the company’s production schedule, profitability, and financial performance.

The top three customers accounted for Rs 42.22 crore (38.30 percent) of the company’s total sales for the period ended September 30, 2025; Rs 79.22 crore (54.34 percent) in FY25; Rs 71.03 crore (54.48 percent) in FY24; and Rs 84.14 crore (62.31 percent) in FY23. The company does not have long-term contractual agreements with these clients, relying instead on recurring orders and ongoing relationships. Loss of one or more of these key customers, a reduction in order volume, or changes in their procurement preferences could adversely affect the company’s revenue, cash flow, and overall financial condition.

Shri Kanha’s manufacturing unit and registered office are both located in Rajasthan. The absence of a diversified manufacturing base increases the company’s vulnerability to regional risks, and any disruption in the state could hurt its production, revenues, and financial performance.

Shri Kanha Stainless relies entirely on third-party transporters for the delivery of raw materials to its manufacturing unit and the dispatch of finished goods to dealer-cum-customers. The company does not have formal or long-term contracts with these transport service providers, and transportation costs are determined on mutual terms and prevailing market rates. Any disruptions such as strikes, logistical delays, or accidents during transit could result in supply chain interruptions, product damage, or delayed deliveries. In addition, since transporters are not contractually bound to work exclusively with the company, competitors offering better terms may divert these providers, potentially affecting Shri Kanha’s operational continuity, sales, and financial performance.

Shri Kanha Stainless undertakes certain transactions denominated in foreign currencies, including machinery purchases and a portion of its export revenues. As its financial statements are prepared in Indian rupees, any unfavourable movement in exchange rates could increase the cost of imported capital equipment and reduce the value of export earnings upon conversion. Although the company may consider hedging strategies to manage such risks, there is no assurance that these measures will be adequate or entirely effective. Adverse fluctuations in foreign exchange rates may therefore materially impact the company’s business and finances.

As of September 30, 2025, the company had outstanding financial indebtedness of Rs 56.02 crore. Failure to service or repay these loans can harm the company’s operations and financial position.