Raksan Transformers Limited: Kanda family holds 94.22% and three seats

Raksan Transformers Limited is controlled by the Kanda family, which held 94.22% of its pre-offer equity and occupied three of its five board seats at the Red Herring Prospectus date. Sanjeev Kanda alone held 85.58%, while two independent directors appointed on July 29, 2025 held no shares.

How concentrated is Kanda family ownership at Raksan Transformers?

Raksan Transformers’ three Kanda family directors held 1,55,28,662 equity shares, equal to 94.22% of pre-offer equity. Sanjeev Kanda held 1,41,03,662 shares, or 85.58%; Diveam Singh Kanda held 4,75,000 shares, or 2.88%; and Renu Kanda held 9,50,000 shares, or 5.76%.

Sanjeev Kanda’s 85.58% holding represented more than nine-tenths of the family’s combined 94.22% stake. Raksan Transformers had eight shareholders as of the Red Herring Prospectus date, and it disclosed no subsisting shareholders’ agreement among shareholders to which it was a party or of which it had notice.

The disclosed 94.22% figure is a pre-offer measure rather than a post-listing ownership figure. Raksan Transformers’ articles do not require directors to own qualification equity shares, so the nil holdings reported for independent directors Kamal Dev Arora and Lokesh Vats do not prevent their board appointments.

Who holds the five Raksan Transformers board seats?

The Kanda family holds three of Raksan Transformers’ five board seats, or 60%, while the two independent directors hold the remaining 40%. Sanjeev Kanda is chairman and managing director, Diveam Singh Kanda is whole-time director, and Renu Kanda is non-executive director.

Kamal Dev Arora and Lokesh Vats are the two non-executive independent directors, both appointed on July 29, 2025 for five-year terms. Renu Kanda is the board’s one woman director, meaning the board composition consists of two executive directors, one non-executive director and two independent directors.

The company disclosed the family connection under Section 2(77) of the Companies Act, 2013. Sanjeev Kanda is the father of Diveam Singh Kanda and husband of Renu Kanda, while Renu Kanda is identified as Diveam Singh Kanda’s mother.

What changed in Raksan Transformers’ board during 2025?

Raksan Transformers added Diveam Singh Kanda as a director on February 3, 2025, appointed two independent directors on July 29, 2025, and changed the designations of its two executive directors on August 4, 2025. These changes produced the five-member board reported in the Red Herring Prospectus.

Diveam Singh Kanda became whole-time director on August 4, 2025 for a five-year term after joining the board in February 2025. The prospectus attributes four years of power and distribution industry experience to him and states that he looks after overall business operations; he is liable to retire by rotation.

Sanjeev Kanda was originally appointed managing director on July 21, 1995 and became chairman and managing director on August 4, 2025 for five years. The prospectus says he has 31 years of power and distribution industry experience and oversees accounts, finance, legal, production, foreign trade, sales and marketing; unlike Diveam Singh Kanda, he is not liable to retire by rotation.

Renu Kanda joined as non-executive director on May 1, 2023, with the disclosed reason of supporting corporate governance and compliance with the Companies Act, 2013. Arora has 40 years of experience, including work as an assistant general manager at Bank of Baroda, while Vats is a qualified company secretary with more than five years of secretarial-law experience.

How do independent directors oversee Raksan Transformers?

Raksan Transformers placed both independent directors on each of its three disclosed core board committees, giving them committee roles in financial reporting, remuneration and shareholder grievances. The Audit Committee, formed through an August 4, 2025 board resolution, is chaired by Arora and includes Vats and Renu Kanda.

The Audit Committee must meet at least four times a year, with no more than 120 days between two meetings. Its stated responsibilities include reviewing financial reporting, related-party transactions, internal financial controls, risk management, statutory-auditor performance and use of funds raised through a public issue.

Arora also chairs the Stakeholders Relationship Committee, where Vats and Sanjeev Kanda are members, and the Nomination and Remuneration Committee, where Vats and Renu Kanda are members. The stakeholders committee must meet at least once a year, while the nomination committee is tasked with recommending criteria for director qualifications, independence and remuneration.

The committee structure gives independent directors formal review responsibilities but does not change the disclosed 94.22% pre-offer family shareholding or the family’s three seats. Raksan Transformers stated that the Securities and Exchange Board of India Listing Obligations and Disclosure Requirements Regulations, 2015 will apply immediately upon listing on the BSE SME platform.

What financial links are relevant to Kanda family control?

Raksan Transformers disclosed remuneration, a personal guarantee and property arrangements involving promoter-family members or associated entities. For fiscal 2025-26, Sanjeev Kanda received Rs 1.5125 crore in compensation and Diveam Singh Kanda received Rs 48 lakh; the company reported no director bonus, profit-sharing, contingent or deferred compensation plan.

Sanjeev Kanda provided a personal guarantee of Rs 63.90 crore for company borrowing facilities, with the guarantee continuing until the loan tenure. Separately, a May 19, 2025 special resolution authorised outstanding principal borrowings of up to Rs 1,500 crore, excluding temporary loans obtained from bankers in the ordinary course; this is an authorised ceiling, not reported debt outstanding.

Raksan Transformers holds a 99.99% interest in Haryana Power Industries, a partnership firm, after acquiring 95% on November 12, 2015 and an additional 4.99% on May 19, 2025. Haryana Power Industries leases a 2,025-square-metre factory and corporate office to Raksan Transformers for 15 years from January 1, 2016 at Rs 15,000 monthly rent.

A separate Haryana Power Industries office tenancy covers 1,551.48 square metres for 11 months from March 1, 2026 at Rs 3.90 lakh monthly rent. Raksan Transformers disclosed that directors may be interested in contracts or arrangements with companies they promote or direct, and in partnership firms in which they are partners, as applicable.

Conclusion

Raksan Transformers combines concentrated promoter-family ownership with a board in which the same family occupies three of five positions. The family’s 94.22% pre-offer stake, including Sanjeev Kanda’s 85.58% individual holding, places voting ownership and executive leadership primarily with the three related directors.

The next point to watch is the application of the governance framework constituted on August 4, 2025, particularly the Audit Committee’s stated review of related-party transactions and use of public-issue funds. The two independent directors’ committee roles and the listing-based Securities and Exchange Board of India requirements will operate alongside the disclosed family ownership structure.