We have presented the localization of kinetic Alfvén wave (KAW) in intermediate β plasma ( m e / m i ≪ β≪1) by developing a model based on pump kinetic Alfvén wave and finite amplitude magnetosonic fluctuations. When KAW is perturbed by these background magnetosonic fluctuations, filamentary structures of KAW magnetic field are formed. First, a semi analytical model based on paraxial approximation has been developed to understand this evolution process. Localized structures and magnetic fluctuation spectrum of KAW has also been studied numerically for finite frequency of KAW. The calculated magnetic fluctuation spectrum follows two types of scalings. Above the proton gyroradius scale lengths (in inertial range), spectrum follows Kolmogorovian scaling. Below this scale dispersion starts and the spectrum steepens to about . The result shows the steepening of power spectra which can be responsible for particle acceleration in solar wind due to the energy transfer from larger to smaller lengthscales. Obtained magnetic turbulent spectra are consistent with observations of Cluster spacecraft in solar wind.