Kheria Autocomp Ltd. IPO

Kheria Autocomp

• Kheria Autocomp is coming out with an initial public offering (IPO) of 45,98,400 shares in a price band of Rs 96 - 101 per equity share.
• The issue will open for subscription on September 17, 2026 and will close on September 21, 2026.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 9.60 times of its face value on the lower side and 10.10 times on the higher side.
• Book running lead manager to the issue is SMC Capitals.
• Compliance officer for the issue is Nisarg Dineshkumar Shah.

Profile of the company

Kheria Autocomp is an auto ancillary unit engaged in the business of plastic injection moulding. It specialises in the manufacture of plastic injection moulding sub- assembly operations and supplying primarily to the automotive sector. In earlier years, the company also catered to the white goods segment; however, its present focus is on the manufacture of automotive plastic moulded parts. It operates as a Tier-II supplier, producing moulded plastic components in accordance with the specifications of Tier-I vendors, who in turn supply to original equipment manufacturers (OEMs) in the passenger vehicle categories. Its product range includes interior cabin trims, exterior plastic parts, under-hood components, and heating, ventilation and air-conditioning (HVAC) ducts. These products are supplied for both internal combustion engine and electric vehicles. In addition to component production, it undertakes basic sub-assembly operations, such as bolt assembly or the fitting of inserts, wherever required by customers. These activities support integration of the moulded components into larger assemblies at the Tier-I level.

Its manufacturing facility is situated within the Tata Vendor Park at Sanand, Gujarat, covering an area of around 3 acres. The facility is equipped with 30 injection moulding machines with capacities ranging from 120 tons to 1,700 tons, procured majorly from Milacron India Private Limited and other vendors. The facility is supported by automation, including systems tailored to customer-specific requirements, along with vision measuring equipment for dimensional verification of components. As on FY26, the installed capacity of its manufacturing unit is 5,400 MTPA. The company has progressively adopted automation, including the installation of multiple robotic systems, to enhance consistency in production.

The company is certified under IATF 16949, ISO 45001:2018 and ISO 14001:2015 and implements lean manufacturing practices supported by standardized operating procedures. Continuous improvement is encouraged through regular process monitoring and review, with a focus on enhancing efficiency, product quality, and cost competitiveness. The company’s location within the Tata Vendor Park at Sanand also provides logistical advantages, as most of its raw material suppliers and key Tier-I customers are located within close proximity, resulting in reduced lead times and transportation costs. It has installed a 636 kW solar power system at its facility, which supports renewable energy usage and reduces reliance on conventional power sources. Together, these initiatives reflect the company’s commitment towards responsible and efficient manufacturing practices. 

Proceed is being used for:

• Part funding of capital expenditure for setting up of new manufacturing facility for plastic moulded auto components at GIDC Sanand Industrial Park
• General Corporate Purposes

Industry overview

India’s auto component industry has evolved into a critical pillar of the country’s automotive ecosystem, exhibiting a consistent growth trend over the past five years. The market includes supplies to domestic vehicle manufacturers (OEMs), the thriving aftersales/replacement segment, and a growing share of international trade, both exports and imports. After a temporary setback in FY 2021 due to the pandemic, the industry has demonstrated strong recovery and expansion, driven by rising vehicle production, increased localization, growing vehicle parc, and India’s emergence as a preferred global sourcing hub. 

The Indian auto component market was valued at Rs 3.4 trillion in FY 2021, reflecting the impact of pandemic-led disruptions on automotive production, supply chains, and vehicle demand. From FY 2022 onwards, the sector entered a strong recovery phase, with market size increasing to Rs 4.2 trillion in FY 2022 and accelerating to Rs 5.6 trillion in FY 2023, supported by higher domestic OEM production, a rebound in replacement demand in the aftermarket, and improved export performance. The industry recorded a turnover of Rs 3.56 trillion in H1 FY 2026, compared with Rs 3.33 trillion in H1 FY 2025, representing a year-on-year growth of 6.8%. This half-year performance aligns with steady vehicle production levels, resilient aftermarket activity, and continued export demand, indicating the persistence of growth momentum into FY 2026.

The Indian auto component industry continues to benefit from strong and targeted policy support in FY 2025-26, with the government’s focus increasingly centred on technology adoption, localization, and electric mobility. Following the conclusion of the FAME-II scheme, the Government of India introduced the PM E-DRIVE scheme in FY 2025, with a total outlay of Rs 10,900 crore, aimed at accelerating EV adoption across two-wheelers, three-wheelers, e-buses, and charging infrastructure. This shift toward a more structured and ecosystem-driven incentive framework is supporting sustained demand for EV-related auto components such as electric drivetrains, power electronics, battery management systems, and thermal solutions. In parallel, the policy allowing 100% Foreign Direct Investment (FDI) under the automatic route remains in place, enabling global OEMs and Tier-1 suppliers to expand manufacturing, R&D, and sourcing operations in India. A key pillar of policy support remains the Production Linked Incentive (PLI) Scheme for Automobile and Auto Components, implemented under the Department of Heavy Industries with a total outlay of Rs 25,938 crore. The scheme is designed to promote domestic manufacturing of advanced automotive technologies, including EV components, safety systems, hydrogen-based technologies, and high-value electronics, and continues to drive committed capital expenditure, localization, and technology partnerships in FY 2025-26.

Pros and strengths

Strategically located manufacturing facilities: The company operates a manufacturing facility at the Tata Vendor Park in Sanand, Gujarat. This location offers logistical advantages due to its proximity to major automobile manufacturing hubs in the region, enabling efficient movement of goods and materials. Its location within the Tata Vendor Park provides additional supply chain benefits, with most raw material suppliers located in and around Ahmedabad city and key Tier I customers are within close proxity to its manufacturing facility. This proximity enables reduced lead times and transportation costs. 

Green energy and sustainability initiatives: The company is engaged in the EV ecosystem, catering to the growing demand for sustainable and future-oriented mobility solutions. Being consistent with this commitment, it has taken steps to integrate sustainable practices into its operations. In line with this, it commissioned a rooftop solar power plant with a capacity of 636 kW. This plant is designed to supply a portion of its total energy requirements, thereby reducing dependence on grid electricity and mitigating exposure to electricity tariff fluctuations. 

Technology enabled manufacturing and process engineering capabilities: The company employs technology enabled manufacturing systems and process engineering to produce a varied range of plastic injection moulded components. It has progressively invested in automation to improve process efficiency. The first industrial robot was installed in 2020, and it has since expanded to over 20 robots. These are deployed for injection moulding operations. It has developed experience in working with complex moulding techniques. This includes handling intricate moulds such as core pulling moulds and unscrewing, which enable it to produce precision components with intricate geometries. These capabilities strengthen its ability to meet stringent dimensional and functional requirements of the automotive ancillary industry.

Risks and concerns

Substantial portion of revenue derives from the state of Gujarat: As per its restated financial statements 99.96%, 99.92%, and 99.88% of its revenue from operations for the financial years ended March 31, 2026, 2025 and 2024, respectively, has been generated from customers based in the state of Gujarat. Revenue from other states collectively accounts for less than 1% of its total revenue during these years. This geographic concentration is primarily attributable to the fact that a majority of its key customers, including automotive OEMs and major Tier-1 suppliers, operate from or procure through facilities located in Gujarat, which has emerged as a significant automotive manufacturing and supplier cluster. Any adverse developments in this region may materially and adversely affect its business and results of operations.

Dependence on Tier-I customers and automotive OEMs: It is engaged in the manufacturing of plastic injection moulding sub- assembly operations and supplying primarily to the automotive sector. The company operates as a Tier-II supplier, manufacturing products strictly in accordance with the designs and specifications provided by Tier-I vendors, who in turn supply directly to OEMs. Consequently, the growth and sustainability of its business are inherently dependent on i) the continued demand from Tier-I vendors, and ii) the order flow and procurement cycles of OEMs in the automotive sectors. For the financial years ended March 31, 2026, 2025, and 2024, its top ten customers contributed 99.95%, 99.99%, and 99.96%, respectively, to its total revenue from operations. Any reduction or discontinuance of their demand may adversely affect its business, financial condition and results of operations.

Exposure to equipment-related disruptions: Its manufacturing operations rely significantly on injection moulding machines and robotic systems procured from third-party manufacturers, such as Milacron. It has 30 injection moulding machines with capacities ranging from 120 tons to 1,700 tons installed at its manufacturing facility, in addition to multiple robotic systems and automated assembly lines that ensure consistency and efficiency in production. These machines and systems are capital intensive, require regular maintenance, and have a finite operational life. Any breakdown, malfunction, or technical failure of its machinery could lead to unplanned stoppages, production delays, or inability to meet customer specifications. Further, sourcing spare parts or technical expertise often requires reliance on equipment manufacturers or authorised suppliers, which may involve significant lead times and costs. Such delays in the procurement of spare parts or technical services could further exacerbate production disruptions.

Outlook

Kheria Autocomp is an auto ancillary unit engaged in the business of plastic injection moulding. It sources raw materials from a network of established and approved suppliers, including vendors nominated by customers. This ensures alignment with their approved supplier lists and maintains uniformity in raw material characteristics across production batches. While sourcing, it takes into account specific requirements such as colour specifications, quality parameters, and grade certifications to ensure that each batch is consistent with customer expectations. On the concern side, a significant portion of the Net Proceeds is proposed to be utilized towards funding its capital expenditure requirements including purchase of plant and machinery for its new manufacturing facility, for which certain orders have been placed. Any delay in procurement, delivery or installation of plant and machinery for its new manufacturing facility, including machinery for which purchase orders have been placed, may delay implementation, result in cost overruns and adversely affect its business operations and growth strategy.

The company is coming out with a maiden IPO of 45,98,400 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 96 - 101 per equity share. The aggregate size of the offer is around Rs 44.14 crore to Rs 46.44 crore based on lower and upper price band respectively. On performance front, revenue from operations increased 30.35% from Rs 9,207.17 lakh in Fiscal 2025 to Rs 12,001.47 lakh in Fiscal 2026.  Profit after tax increased 38.55% from Rs 824.49 lakh in Fiscal 2025 to Rs 1,142.33 lakh in Fiscal 2026.

Meanwhile, it plans to expand its manufacturing capacity to address the increasing demand from the automotive industry as an auto ancillary unit and to support its future growth plans. This will be achieved by setting up a new manufacturing facility in a Gujarat Industrial Development Corporation (GIDC) area. The proposed location is strategically chosen to benefit from the well developed industrial infrastructure and its proximity to major automotive manufacturing clusters in the region. This will facilitate improved operational efficiency, reduced transportation time and cost, and a more streamlined supply chain. Going forward, it aims to broaden its customer base within the passenger vehicle segment while expanding into adjacent and emerging automotive markets, including the rapidly growing electric vehicle (EV) segment. This dual focused approach is designed to reduce dependence on a limited number of customers, capture new market opportunities, and position the company for sustained growth in a transforming mobility landscape.