KVS Castings coming with IPO to raise Rs 27.83 crore

KVS Castings 

• KVS Castings is coming out with an initial public offering (IPO) of 49,70,000 equity shares in a price band of Rs 53-56 per equity share. 
• The issue will open on September 26, 2025 and will close on September 30, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 5.30 times of its face value on the lower side and 5.60 times on the higher side. 
• Book running lead manager to the issue is Narnolia Financial Services. 
• Compliance Officer for the issue is Shweta Mehrotra.

Profile of the company

As the Foundry Division of the KVS Premier Group, the company specializes in quality ferrous castings. The company is involved in the manufacturing and production of Cast Iron and Ductile Iron castings. It delivers comprehensive casting solutions tailored to meet its customers' needs. From cast iron to stainless steel, it offers a total casting solution under one roof, with a portfolio of more than 150 products, including Suspension Brackets, Brake Drums, Gear Box Housing, Pump Body, Oil Filters and more. It ensures maintaining the required quality standards, it is accredited with certifications in IATF 16949:2016, ISO 9001:2015 and Certified by the RDSO (Research and development organization under the Ministry of Railways in India). 

The company is the castings supplier for various industries, including Automobile including passenger and commercial vehicles, Railway, Heavy Machinery and Equipment, Energy and Power Generation, Infrastructure and Construction and Agricultural Machinery includes Tractor. The company’s manufacturing facility is equipped with advanced technology and have facilities for producing quality castings. Its comprehensive setup includes a Melting Shop, Pattern Shop, Moulding Shop, Fettling Department, Heat Treatment Facility, Machine Shop Facility, Quality Control Department, and Lab Testing Equipment. 

Proceed is being used for:

• Meeting the capital expenditures
• The general corporate purposes

Industry Overview

The India Foundry Market size is estimated at $25.57 billion in 2025, and is expected to reach $42.61 billion by 2030, at a CAGR of 11.13% during the forecast period (2025-2030). During the COVID-19 pandemic in December 2020, more than 400 small foundries in Coimbatore shut their doors due to rising raw material prices. The shutdown affected lakhs of employees working in and with the foundries, as well as in other industries such as pumps, textile machines, automobiles, and other engineering sectors. Moreover, in March 2022, several foundry units in Kolhapur were temporarily closed and declared three to four days of holiday for their employees due to a sharp increase in raw material prices caused by the Russia-Ukraine war. The Indian foundry market is primarily driven by rapid industrialization and urbanization, which have increased the utilization of the metal casting process across the country. The surge in automobile manufacturing is also a significant factor boosting market growth. The Indian Foundry Industry data indicates around 500,000 direct and 15,00,00 indirect employees, making it a significant source of employment, primarily for socially and economically disadvantaged sections. Forecasts suggest the potential creation of an additional 2 million jobs over the next decade due to the industry's labour-intensive nature. 

The automotive components industry experienced a 11% YoY growth, reaching Rs 3.32 lakh crore ($ 38.4 billion) in the first half of FY25. India has become the fastest-growing economy in the world in recent years. This fast growth, coupled with rising incomes, a boost in infrastructure spending and increased manufacturing incentives, has accelerated the automobile industry. The two-wheeler segment dominated the automobile industry because of the Indian middle class, with automobile sales standing at 23.85 million units in FY24. Significant demand for automobiles also led to the emergence of more original equipment and auto components manufacturers. As a result, India developed expertise in automobiles and auto components, which helped boost international demand for Indian automobiles and auto components. Hence, the Indian automobile industry has a considerable impact on the auto component industry. In 2024, India produced 100,000 electric cars and 900,000 electric two-wheelers. However, Internal Combustion Engine (ICE) vehicles still dominate with 20 million two-wheelers and 5 million cars produced. India’s auto component industry is an important sector driving macroeconomic growth and employment. 

Pros and strengths

Diversified customer base: The company has established long-standing relationships with its diverse customer base, including Original Equipment Manufacturers (OEMs) and Tier-1 customers in the commercial vehicle, tractor, railways, and off-highway vehicle segments across India. It manufactures brake systems for Indian Railways. The company provides almost the entire range of the casting portion for break assembly. It handles casting, machining, painting/powder coating, and leakage testing all under one roof.

Strategic location: The company’s plant in Kashipur is strategically located just 50 km from Rudrapur, a major manufacturing hub with several leading global automotive companies. This proximity forms a key customer base and a reliable source of steel scrap, a critical raw material. Kashipur is well connected through road and rail transportation useful for input and finished products supplies. 

Dedicated and experienced workforce: The company has an experienced management team with an established process led by its Individual promoter and managing director, Arpan Jindal, who has significant industry experience of 16 years in the Castings Industries. Its management and employees team combine expertise and experience in foundry and casting which helps for the future development of the company. Its qualified management team helps it in capitalizing the market opportunities and enables it to function effectively and efficiently.

Risks and concerns

Majorly dependent on Auto Component products: The company is majorly dependent on auto components products as it contributes around 80% revenue. If the demand for this product declines due to changes in market trends, customer preferences, or technological advancements, the company's revenue can be severely impacted, dependency on one product makes the company's revenue stream highly volatile and sensitive to any disruptions in the product's market. However, it is continuously diversifying its business into other sectors such as Defense, Power Transmission, Railways, and Farm.

Operations rely on third-party transporters: The company is involved in the manufacturing and production of Cast Iron and Ductile Iron castings. The success of its endeavors is contingent upon the seamless procurement and transportation of raw materials essential for the casting processes and the efficient distribution of its products to clients. This supply chain is inherently exposed to diverse uncertainties and risks. Furthermore, the transit of raw materials is susceptible to potential losses or damages arising from accidents or natural disasters. Delays in the delivery of raw materials and its products to its client also pose a risk, potentially impacting on its business and operational outcomes negatively. The inability to sustain an uninterrupted and efficient supply chain may exert a material and adverse influence on its business, financial condition, and operational results.

Maximum revenue comes from limited customers: The company derives a significant portion of its revenue from operations from its top ten customers. The company has garnered 84.36%, 99.75% and 95.60% of its total revenue from top ten customers in FY25, FY24 and FY23 respectively. Loss of any of these customers or a reduction in purchases by any of them could adversely affect its business, results of operations and financial condition.

Outlook

KVS Castings is engaged in the manufacturing of cast iron, SG iron, alloy steel, and stainless-steel castings. The company specialises in producing components for the automobile, locomotive, and engineering sectors, emphasising innovation and adherence to quality standards. The company has diversified product portfolio with diversified customer base. On the concern side, the company’s manufacturing unit’s requires significant electricity requirements and currently it has availed a power connection from Uttarakhand Power Corporation for its manufacturing unit premises. Further any interruption in the supply of power may temporarily disrupt its operations. Also, the company is governed by various laws and regulations for its business and operations. It is required, and will continue to be required, to obtain and hold relevant licenses, approvals and permits at state and central government levels for doing its business. 

The company is coming out with a maiden IPO of 49,70,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 53-56 per equity share. The aggregate size of the offer is around Rs 26.34 crore to Rs 27.83 crore based on lower and upper price band respectively. On performance front, the total income of the company for the financial year ended March 31, 2025, was Rs 5,043.22 lakh against Rs 5,470.31 lakh for the financial year ended March 31, 2024, representing a decrease of 7.81%. The company had reported a profit after tax for the financial year ended March 31, 2025 of Rs 662.53 lakh against profit after tax of Rs 595.10 lakh for the financial year ended March 31, 2024, representing an increase of 11.33%. 

The company plans to procure machinery for use in the Manufacturing Plant (Unit-02) as part of its strategic initiative to automate processes. This automation aims to optimize capacity utilization and ensure timely product deliveries while maintaining expected quality standards. Currently, the facility has a production capacity of up to 600 metric tons per month, with the installation of the new plant and machinery, this capacity will be increased to 1,000 metric tons per month.