Kheria Autocomp IPO

Market Expansion: The Indian auto component market increased from ₹3.4 trillion in FY 2021 to ₹6.7 trillion in FY 2025, driven by higher vehicle production, component localisation and increasing global sourcing.  

H1 FY 2026 Performance: Industry turnover stood at ₹3.56 trillion in H1 FY 2026, registering 6.8% YoY growth compared with ₹3.33 trillion in H1 FY 2025. Domestic OEM sales grew at a 13.4% CAGR between FY 2021 and FY 2025.  

Long-Term Growth: The auto component market is projected to reach ₹17.1 trillion by FY 2030 from ₹6.7 trillion in FY 2025, implying a CAGR of around 20.6%.  

Component Mix: Engine components accounted for the largest share of OEM component output at 26%, followed by suspension and braking at 15%, body/chassis/BiW at 14%, transmission and steering at 13%, electricals and electronics at 12%, interiors at 11%, consumables and miscellaneous components at 7%, and rubber and cooling systems at 2%.  

Plastic Processing Market: India’s plastic processing industry is expected to grow from ₹3.5 trillion to ₹10 trillion by FY 2028, representing an annual growth rate of 10%–15%. Automotive applications include interior trims, exterior components, under-hood parts and EV power electronics enclosures.  

EV Adoption: Domestic EV sales increased from 50,000 units in FY 2021 to approximately 2.55 million units in FY 2026. Rising EV adoption is creating demand for battery housings, thermal management systems, power electronics enclosures and lightweight polymer components.  

Vehicle Lightweighting: CAFE norms and increasing EV and SUV penetration are supporting the replacement of traditional metal components with engineered polymers such as polypropylene, ABS, Nylon 6 and polycarbonate.  

Vehicle Production: Domestic vehicle production reached 34.71 million units in FY 2026, compared with 31.03 million units in FY 2025. Two-wheelers accounted for 26.69 million units, while passenger vehicle production stood at 5.54 million units.  

Exports & Aftermarket: Around 25% of India’s auto component production is exported, with a government target of increasing exports to USD 100 billion by 2030. Aftermarket turnover reached ₹531.6 billion in H1 FY 2026, supported by the growing vehicle base and longer vehicle retention periods.  

Manufacturing Incentives: The PLI scheme for auto and auto components has an allocation of ₹25,938 crore, while the PLI scheme for Advanced Chemistry Cell batteries has an allocation of ₹18,100 crore, supporting domestic automotive and battery manufacturing.  

EV Support: The PM E-DRIVE scheme has an outlay of ₹10,900 crore to support EV adoption and charging infrastructure.  

Budgetary Measures: Union Budget 2026–27 includes measures such as customs duty exemptions on capital equipment for lithium-ion battery cell manufacturing, a ₹40,000 crore Electronics Components Scheme, Semiconductor Mission 2.0 and a ₹10,000 crore SME Growth Fund.  

Safety & Scrappage: Bharat NCAP is supporting demand for safety-related components such as airbags, sensors and ECUs, while the vehicle scrappage policy can support replacement demand for older vehicles.  

Industry Structure: The auto component industry is fragmented, with Tier-1 suppliers supplying integrated systems directly to OEMs and Tier-2 and Tier-3 manufacturers supplying sub-assemblies and specialised components.  

Key Players: Prominent listed companies in the auto component and plastic moulding segment include PPAP Automotive Limited, Machino Plastics Limited, Bharat Forge, Motherson Sumi Systems, Bosch and Sundaram Fasteners.  

Entry Barriers: OEM vendor qualification involves technical audits, long product development cycles and certifications such as IATF 16949, ISO 14001 and ISO 45001. The sector also requires investment in precision injection moulding machinery, robotics, and automated inspection systems, while localisation capabilities are increasingly important for OEM suppliers. 

Setting Up Manufacturing Facility: ₹39.96 crore for part-funding the capital expenditure required to set up a new manufacturing facility for plastic-moulded auto components at GIDC Sanand Industrial Park.  

General Corporate Purposes: The remaining funds will be used for general corporate purposes. 

Experienced Management: Kheria Autocomp Limited has over a decade of experience in precision plastic injection moulding, supported by promoters with more than 30 years of industry experience.  

Strategic Manufacturing Location: Its existing facility at Tata Vendor Park, Sanand, Gujarat, is located close to key Tier-I customers and raw material suppliers, supporting just-in-time deliveries and reducing transportation costs and lead times.  

Advanced Manufacturing Capabilities: The company operates injection moulding machines with 120-tonne to 1,700-tonne clamp force capacities, supported by industrial robotics and SAP-based inventory and material tracking systems.  

Quality & Testing Infrastructure: KAL holds IATF 16949, ISO 14001:2015 and ISO 45001:2018 certifications and has in-house testing equipment, including Vision Measuring Machines and Melt Flow Index testers.  

Established Tier-I Relationships: The company has established relationships with Tier-I automotive component suppliers, supporting repeat business across passenger vehicle platforms.  

Sustainability Initiatives: Its existing facility has a 636 kW rooftop solar power system and four groundwater recharge wells, supporting energy and water conservation.  

New Manufacturing Facility: IPO proceeds will be used to part-fund a new manufacturing facility at GIDC Sanand-II Industrial Estate, located close to the existing plant and allowing the company to leverage existing resources.  

Higher Content Per Vehicle: The company can increase its value per vehicle by moving from standalone moulded components towards integrated sub-assemblies such as interior modules, HVAC ducts and exterior trims.  

EV Component Opportunities: The shift towards electric vehicles provides opportunities to expand into plastic components such as battery enclosures, thermal management housings, power electronics casings and charging station covers.  

Customer Diversification: Expanding its customer base across Tier-I suppliers and passenger vehicle OEMs could help reduce dependence on a limited number of customers.  

Technology & Automation: Adoption of high-tonnage two-shot injection moulding machines, automated vision inspection systems and IoT-enabled predictive maintenance can support manufacturing efficiency and product quality. 

High Customer Concentration: KAL’s revenue is heavily dependent on a small number of customers. In FY 2026, 97.32% of revenue from operations came from its top 5 customers, while the top 10 customers contributed 99.95%. Any reduction or delay in orders from major customers could affect the company’s financial performance.  

Geographic Concentration: 99.96% of revenue from operations in FY 2026 was generated from customers located in Gujarat. Any regional disruption, economic slowdown, policy change or supply chain issue in the state could affect operations. 

Dependence on a Single Manufacturing Facility: KAL currently operates production from a single facility at Tata Vendor Park, Sanand. The land is leased from Tata Motors Limited under a 35-year lease, making the company dependent on the continued availability of this facility.  

Supplier Concentration: The company does not have long-term fixed-price agreements with raw material suppliers. Its top 10 raw material suppliers accounted for 77.48% of total material consumption in FY 2026, increasing exposure to supply disruptions and pricing changes.  

Pending Approvals for Plant II: The proposed GIDC Sanand-II facility is yet to receive certain approvals, including the Factory License, GPCB Consent to Operate, Fire NOC and Building Stability Certificates. Delays could affect the project’s completion and commercial operations.  

Past Compliance Delays: KAL has reported instances of delays in certain statutory filings and Provident Fund contributions. Further compliance lapses could result in penalties or regulatory action.  

Automotive Industry Cyclicality: The company’s business depends on vehicle production and procurement by Tier-I suppliers. A slowdown in passenger vehicle demand, changes in fuel prices or higher interest rates could reduce orders.  

Technology Changes in EVs: The shift towards EVs requires changes in component designs, materials and tooling. Failure to adapt to evolving EV requirements could affect the company’s ability to retain or secure business.  

Raw Material Price Volatility: Raw materials such as polypropylene, ABS, Nylon and polycarbonate accounted for 67.70% of revenue from operations in FY 2026. Increases in resin, power or fuel costs could put pressure on margins.  

Intense Competition: The auto component and plastic injection moulding industry is fragmented and competitive, with KAL competing against both established players and smaller regional manufacturers. Price competition could affect margins and customer acquisition.  

NSE EMERGE Listing Risks: The company’s shares will be listed on the NSE EMERGE platform and do not have a prior public trading history. Investors may face price volatility, limited liquidity and daily price movement restrictions. 

Kheria Autocomp IPO DRHP 

Kheria Autocomp IPO RHP 

SMC Capitals Limited 

Contact Number: 040-79615565 

Email Address: Kheria.ipo@kfintech.com