Kanodia Cement IPO

About Kanodia Cement IPO

The IPO of Kanodia Cement comprises only an offer for sale aggregating up to 14,913,930 equity shares. There’s no fresh issue in this IPO. It’s a 100% book-built issue. The price band is TBA. The IPO opens on TBA and closes on TBA.

The listing date is on TBA and the allotment date is on TBA. The credit of shares to the Demat accounts of the allottees will take place on TBA, while initiation of refunds will take place on TBA.

Kanodia Cement is a cement manufacturing company operating through satellite grinding units (SGUs) in the states of Uttar Pradesh and Bihar, specialising in the production of blended cement such as portland pozzolana cement and composite cement. As per the CRISIL Report, Kanodia Cement is one of the pioneers in the contract manufacturing of cement in India.

Objectives of Kanodia Cement IPO

The objects of the offer are to achieve the benefits of listing the equity shares on the stock exchanges and carry out the offer for sale of up to 14,913,930 equity shares of face value of ₹ 10 each.

The company will not receive any proceeds from the offer and all such offer proceeds (net of any offer related expenses to be borne by the selling shareholders) will go to the selling shareholders, in proportion to the offered shares sold by the respective selling shareholder as part of the offer.

Industry Outlook

The cement Industry in India witnessed an investment of ~₹ 1086 bn in the past five years (fiscal 2020-2024) with regards to adding new capacities, brownfield expansions, debottlenecking, and maintenance of existing plants. With demand recovering in the past three fiscals and increased competitive intensity, the players, especially the large ones, are implementing sizable capex over the next five years with the aim to capture the market share.

Robust demand has bolstered the balance sheets of large players and mid-sized players with strong market presence, prompting them to expand capacity on the back of healthy cash accrual and credit profile. Domestic cement demand grew at a healthy ~6% CAGR over fiscal 2019 to 2024, despite pandemic-induced slowdown, majorly led by sustained government thrust on infrastructure and affordable housing.

Over the next five years, i.e., fiscals 2025 to 2029, Crisil Intelligence expects cement demand to clock a healthy 6.5-7.5% CAGR, moderately higher than ~6% CAGR in the previous five years. Growth will be driven by a raft of infrastructure investments and healthy momentum from the housing segment.

Initiatives undertaken by the Government of India, such as the Bharatmala Pariyojna, Sagar Mala, the Pradhan Mantri Awaas Yojana – Gramin and Urban, Atmanirbhar Bharat Abhiyan, Product Linked Incentive Scheme, Swachh Bharat Mission, Ude Desh ka Aam Naagrik (UDAN) for airports and metro projects along with the thrust on infrastructure will drive demand growth in the medium term for the cement industry in India. This presents a major opportunity for growth in the cement industry in India.

Kanodia Cement Company Information

Kanodia Cement is a cement manufacturing company operating through satellite grinding units (SGUs) in the states of Uttar Pradesh and Bihar, specialising in the production of blended cement such as portland pozzolana cement and composite cement.

It operates through a unique combination of business-to-business contract manufacturing for cement brands (contract manufacturing model) and production and marketing of own consumer brands (business-to-consumer model).

Strengths of Kanodia Cement

• Strategic and timely capacity additions driving growth in installed capacity, sales volume, and revenue from operations
  
• Pioneers in contract manufacturing of cement with strong, established relationships with key brands
  
• Strategically located SGUs enabling market access, savings in freight costs, accessibility to blending materials and eligibility for state-backed incentives resulting in a strong business model
  
• Consistent financial performance driven by strategic focus on cement production and a capital efficient business model
  
• Experienced promoter, backed by a professional senior management team
  

Risks of Kanodia Cement

• If one or more customers choose not to source their requirements from the company, it may affect business
  
• Absence of long-term agreements may expose the company to increased business uncertainty and reduced revenue predictability
  
• Disruption in the operations of subsidiaries could have an adverse impact on business
  
• Business operations are currently concentrated in the states of Uttar Pradesh and Bihar
  
• Delays in payment of statutory dues by the company and material subsidiaries in future may attract financial penalties
  
• Disruption to the timely and adequate procurement of raw materials could have an adverse impact on business
  
• Applications to increase the number of operational days for its SGUs at KCL Sikandrabad Units 1, 2, and 3 is pending approval from the Uttar Pradesh Pollution Control Board
  
• Non-performance or delayed repayment of loans may result in the company and its subsidiary facing disruptions in cash flow
  
• Disruption to the supply of power or increase in power costs could disrupt its manufacturing operations
  
• Any disruption, breakdown or shutdown of its SGUs may have a material adverse effect on business
  

Anchor Investor Bidding Date

TBA

IPO Registrar and Book Running Lead Managers

• IPO Registrar: MUFG Intime India
• Book Running Lead Managers: Anand Rathi Advisors, IIFL Capital Services and Oneview Corporate Advisors

Kanodia Cement Business Model

Kanodia Cement operates through a unique combination of business-to-business contract manufacturing for cement brands (contract manufacturing model) and production and marketing of its own consumer brands (business-to-consumer model).

Under its contract manufacturing model, the company has entered into and is currently operating through cement sale and purchase agreements with established cement brands in India. In addition to the contract manufacturing model, the company markets cement through the business-to-consumer model through its KCL Sikandrabad location and KCPL Amethi location, under its own brands, ‘Concrete Gold’, ‘BigCem Premium Plus’, ‘BigCem Cement’, ‘HBM Gold’ ‘HBM’, and ‘Bluestar Cement’.

Kanodia Cement Growth Trajectory

Revenue from operations of Kanodia Cement grew from ₹488.454 crores in FY 23 to ₹887.907 crores in FY 25, while PAT margin increased from 8.26% in FY 23 to 12.82% in FY 25. Also, the company is one of the fastest growing cement manufacturing companies in terms of increase in sales volume from fiscal 2022 to fiscal 2024, growing at a CAGR of 36.14%, compared to the industry average of 11.10% and peer average of 8.80%.

Further, Kanodia Cement is also one of the fastest growing cement manufacturing companies in terms of growth in revenue from operations for the period fiscal 2022 to fiscal 2024, growing at a CAGR of 34.83%, compared to the industry average of 13.61% and peer average of 12.04%.

Kanodia Cement Market Position

Kanodia Cement was incorporated in 2009 and commenced operations in 2011 with its first SGU in Sikandrabad (western Uttar Pradesh) with a cement grinding capacity of 0.30 MTPA. As on December 31, 2024, it operated five SGUs across Sikandrabad (western Uttar Pradesh), Amethi (eastern Uttar Pradesh) and Bhabua (Bihar) with an aggregate cement manufacturing capacity of 3.54 MTPA.

How to Check Allotment Status of Kanodia Cement IPO?

1. Visit the Registrar’s Website

• Visit the website of MUFG Intime India
• Choose ‘Public Issues’ from Investor Services dropdown
• Choose the name of the company from ‘Select Company’ dropdown
• Enter any of these - PAN Number, Application Number, DP/Client ID, Account Number / IFSC
• Click on Submit to check the status

2. Check on the National Stock Exchange Website

The National Stock Exchange (NSE) website has an IPO bid verification module. You can use it to check the allotment status of Kanodia Cement IPO. Go to the NSE website and find the ‘Invest’ tab. Click on ‘Verify IPO Bids’ under ‘Resources & Tools’.

On the NSE IPO bid verification page, enter:

• Company name from dropdown
  
• Application number
  
• PAN
  

Then click ‘Submit’ to know the allotment status.

3. Check on BSE Website

The Bombay Stock Exchange (BSE) also has an IPO allotment status page. Go to the BSE website and find the ‘Investors’ tab. Under ‘Investors’, click on ‘IPO’. This will take you to the IPO allotment status page. On the BSE IPO page, follow these steps:

• Select ‘Equity’ from the dropdown menu
  
• Choose ‘Kanodia Cement’ in the next dropdown
  
• Enter your application number
  
• Enter your PAN
  
• Click ‘Search’ to know allotment status
  

How to Apply for the Kanodia Cement IPO?

To apply for this IPO:

• Log in to your Kotak Neo Demat account: Log in to your Demat account to access IPO investments. Next, select the current IPO section.
  
• Specify IPO details: Enter the number of lots and the price you wish to apply for.
  
• Enter UPI ID: After entering your UPI ID, click submit. This will place your bid with the exchange.
  
• Mandate Notification: Your UPI app will receive a mandate notification to block funds.
  
• Approve Request: Your funds will be blocked once you approve the mandate request on your UPI.