Kanodia Cements, one of the fastest-growing players in India’s cement industry and part of the Kanodia Group has submitted its IPO papers with the Securities and Exchange Board of India (SEBI). Kanodia Cements IPO is entirely an Offer for Sale (OFS), involves up to 14.91 million equity shares of face value INR 10 each.
Backed by a unique hybrid business model and operating in the strategically critical “cement deficit” markets of Uttar Pradesh and Bihar, Kanodia Cements is looking to capitalize on its accelerated growth and market penetration in recent years. Here’s a detailed investigation which investors should know.
Kanodia Cement’s Business Model
Kanodia Cements operates through a hybrid business model combining:
- Contract Manufacturing Model
Under this, the company manufactures cement on behalf of major brands who supply the clinker—a key input—while Kanodia manages grinding and packaging. This B2B model reduces working capital intensity and shields the company from raw material price volatility.- Revenue Share FY24: 79.61%
- Top clients include: JK Lakshmi Cement, Prism Johnson, and two national brands.
- Business-to-Consumer (B2C) Model
Through its own brands like Concrete Gold, BigCem, HBM Gold, and Bluestar Cement, the company sells directly to customers via a network of dealers and POS points in North India.- Revenue Share FY24: 13.08%
This mixed model ensures predictable revenue through long-term contracts while also allowing margin expansion through consumer brand plays.
Impressive Financial Performance
Kanodia Cements has clocked remarkable growth, outperforming the broader industry in every key metric from FY22 to FY24:
- Revenue CAGR (FY22–24): 34.83% (vs industry average 13.61%)
- Sales Volume CAGR (FY22–24): 36.14%
- EBITDA Margin FY24: 17.21%
- PAT FY24: INR 113.84 crore (up from INR 40.36 crore in FY22)
- Return on Capital Employed (RoCE): 36.47%
- Net Debt: Negative at INR 92.35 crore in FY24, indicating a net cash position
These numbers position the company not only as a growth stock but also as a financially disciplined operator.
SGU Strategy: Smart Cement Manufacturing
Kanodia’s five Satellite Grinding Units (SGUs) allow decentralized cement grinding close to consumption centers, thus cutting freight and logistics costs—a vital edge in a low-margin commodity like cement.
Installed Capacity (FY24): 3.54 MTPA
Key Regions: Sikandrabad, Amethi (U.P.), Bhabua (Bihar)
Utilization Rate: Improved from 46.10% in FY22 to 60.23% in 9M FY25
Given the lack of limestone in Bihar and U.P., Kanodia’s SGU strategy is uniquely positioned to thrive in these “Cement Deficit Regions.”
Kanodia Cements IPO Details: Who’s Selling and What’s the Stake?
The IPO is purely an Offer for Sale, with major promoter-related entities paring down their holdings.
| Selling Shareholder | Shares Offered | Pre-Offer Stake (%) |
|---|---|---|
| Nupoor Kanodia Beneficiary Trust | 81,91,170 | 36.48% |
| Gautam Kanodia | 44,77,370 | 6.00% |
| Swati Kanodia | 22,42,660 | 3.01% |
| Gautam Kanodia HUF | 2,730 | ~0% |
Pre-Offer Total Promoter Group Holding: ~98.94%
Post-Offer (est.): Expected to drop by ~20%+, depending on final pricing and subscription.
Notably, Vishal Kanodia, the Promoter and face of the company, is not selling any shares, possibly signaling long-term confidence.
Advisors and Book Runners
- Anand Rathi Advisors
- IIFL Capital Services
- Oneview Corporate Advisors
- Registrar: MUFG Intime India
Valuation and Outlook
The company’s asset-light, cash-generating model, combined with state subsidies and long-term contracts, offers insulation against sectoral headwinds. It also benefits from:
- Government incentive schemes in Bihar and U.P.
- Cost-effective clinker transport model
- ISO-certified manufacturing units
- Net cash balance sheet and strong ROCE
However, as a 100% OFS, the IPO proceeds will not be used for business expansion or deleveraging—an aspect that might matter to long-term institutional investors.
Bottom Line
Kanodia Cements is not just another cement IPO. It’s a story of smart manufacturing, capital discipline, and strategic regional dominance. With a sharp focus on unit economics and growth in cement-starved states, this IPO is likely to draw strong interest from both institutional and retail investors.
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