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Kaynes Technology IPO Review: Kaynes Technology India Limited is coming up with its Initial Public Offering. The IPO will open for subscription on November 10th, 2022, and close on November 14th, 2022. It is looking to raise Rs 857.82 Crores, out of which Rs 530 crores will be a fresh issue and the remaining Rs 327.82 Crores will be an offer for sale.

In this article, we will look at the Kaynes Technology IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out!

Kaynes Technology IPO Review – About The Company

Kaynes Technology is a leading end-to-end and IoT solutions-enabled integrated electronics manufacturing player, having capabilities across the entire spectrum of electronics system design and manufacturing (“ESDM”) services.

It is engaged in providing conceptual design, process engineering, integrated manufacturing, and life-cycle support for major players in the automotive, industrial, aerospace and defense, outer space, nuclear, medical, railways, Internet of Things (“IoT”), Information Technology (“IT”), and other segments.

It is among the first companies in India to offer design-led electronics manufacturing for original equipment manufacturers (“OEMs”).

Key business verticals of the company

OEM – Turnkey Solutions – Box Build (“OEM – Box Build”): They are into “Build To Print” or “Build to Specifications” of complex box builds, sub-systems, and products across various industry verticals.

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OEM – Turnkey Solutions – Printed Circuit Board Assemblies (“PCBAs”) (“OEM – Turnkey Solutions”): They undertake turnkey electronics manufacturing services of PCBAs, cable harnesses, magnetics, and plastics ranging from prototyping to product realization including mass manufacturing.

ODM:  It provides IoT solutions for making smart consumer appliances or devices IoT-connected such as smart metering technology, smart street lighting, brushless DC (“BLDC”) technology, inverter technology, and gallium nitride-based charging technology.

Product Engineering and IoT Solutions: They have a portfolio of hardware, software accelerators, and proprietary sensors along with cloud platform-based service and solution offerings in asset tracking, remote device management, and smart product development.

The competitors of the company

Kaynes Technology IPO Review - Competitor

Kaynes Technology IPO Review- Financial Highlights

Kaynes Technology IPO Review - Financials

Kaynes Technology IPO Review – Industry Overview

The global electronics system design and manufacturing services market (“ESDM”) was estimated at USD 804 billion in 2020 and is expected to reach USD 1,002 billion in 2025 at a growth rate of 4.5%.

Electronics is one of the fastest-growing industries in India. The total electronics market in India is valued at ₹ 6,711 billion (USD 91 billion) in Fiscal 2021, which is expected to grow at a CAGR of 25.5% to reach ₹ 20,873 billion (USD 282 billion) in Fiscal 2026.

The total ESDM market in India was valued at ₹ 2,654 billion (USD 36 Billion) in Fiscal 2021 and is expected to grow to ₹ 9,963 Billion (USD 135 Billion) in Fiscal 2026 at a CAGR of 30.3%. 

Strengths

  • It is a leading end-to-end and IoT solutions-enabled integrated electronics manufacturing player in India.
  • The company has a wide-ranging product portfolio having applications across industry verticals that ensure consistent revenue inflow.
  • They have long-standing relationships with marquee customers that include names like Hitachi Rail STS India Pvt Ltd, Siemens Rail Automation Pvt Ltd, and Tonbo Imaging India Pvt Ltd among others.
  • The company has advanced infrastructure across multiple facilities in India along with Global certifications for each industry vertical catered by them.
  • They have a strong supply chain and sourcing network in both domestic and international markets.

Weaknesses

  • The company is subject to strict quality requirements, customer inspections, and audits. Any failure to comply with them will negatively impact the business.
  • The company has significant working capital requirements. Any changes in the cash flow situation will affect their operations.
  • The company follows Customer-driven pricing. Any reductions will affect the profitability margins of the company.
  • The business of the company is manpower intensive which makes it subject to risks such as labor unrest or slowdowns. Along with that, it is also exposed to Technological risks, Credit risks, and currency fluctuations.
  • The nature of the business is seasonal. Therefore, the results of their operations may not be comparable across all quarters.

Kaynes Technology  IPO Review – GMP

The shares of Kaynes Technology traded at a premium of 2.21% in the grey market on November 9th, 2022. The shares tarded at Rs 600. This gives it a premium of Rs 13 per share over the cap price of Rs 587. 

Kaynes Technology – Key IPO Information

Kaynes Technology IPO Review - Key Information

Promoters: Ramesh Kunhikannan, Savitha Ramesh, and RK Family Trust.

Book Running Lead Managers: IIFL Securities Limited and DAM Capital Advisors Limited.

Registrar To The Offer: Link Intime India Private Limited

ParticularsDetails
IPO Size₹857.82 Crore
Fresh Issue₹530 Crore
Offer for Sale (OFS)₹327.82 Crore
Opening dateNovember 10, 2022
Closing dateNovember 14, 2022
Face Value₹10 per share
Price Band₹559 to ₹587 per share
Lot Size25 Shares
Minimum Lot Size1 (25 Shares)
Maximum Lot Size13 (325 Shares)
Listing DateNovember 22, 2022

The Objective of the Issue

The Net Proceeds from the Fresh Issue are proposed to be utilized for:

  • Repayment/ prepayment, in full or part, of certain borrowings availed by the Company.
  • Funding capital expenditure toward the expansion of their existing manufacturing facility at Mysore, Karnataka, and near the existing manufacturing facility at Manesar, Haryana.
  • Investment in their Subsidiary, Kaynes Electronics Manufacturing Private Limited, for setting up a new facility at Chamarajanagar, Karnataka.
  • Funding working capital requirements of the Company.
  • General corporate purposes.

In Closing

In this article, we looked at the details of Kaynes Technology IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.

Are you applying for the IPO? Let us know in the comments below.

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