Nov 10, 2022
By: Bhakti MakwanaThe IPO of Mysore-based Kaynes Technology opened on November 10 and will close on November 14. The price band of the IPO is ₹559-587 a share.
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The grey market premium (GMP) for the company’s shares stood at ₹15 per share. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.
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Kaynes Technology raised ₹256 crore from anchor investors ahead of the IPO opening. It allocated 43.76 lakh shares at the upper price band of ₹587 per share.
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Analysts at Anand Rathi said that at the upper price band the company is demanding a PE of 81.9 times its trailing twelve-month earnings and a market cap of ₹3,412 crore. The broking firm says “it is fairly priced considering its decent historical growth, strong revenue visibility and growing demand of automation across underlying industries.”
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Among other things, Angel One broking is concerned about the fact that the company is generating a majority of its revenue from its top 10 customers only. It recommended a ‘Neutral’ rating on the issue.
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Kaynes Technology notes that in Q1 FY23, its top ten customers contributed to nearly 63 percent of its total revenue.
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Kaynes Technology is an internet-of-things (IoT) solutions-enabled integrated electronics manufacturing company.
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The IPO includes a fresh issue of shares worth ₹530 crore and an offer for sale by promoters and shareholders worth ₹327 crore.
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The company intends to use the proceeds of the fresh issue for repaying some of its borrowings, funding capital expenditure requirements for expanding its manufacturing capacity, and for working capital needs.
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Kaynes Technology’s profit jumped to ₹42 crore in FY22 from ₹10 crore in FY21. Its revenue surged 68 percent to ₹706 crore in FY22 from ₹421 crore in FY21.
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Some listed peers of the company include Syrma SGS Technology, Dixon Technologiesand Amber Enterprises.
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The company’s shares are scheduled to be allotted on November 17 and the stock will be listed on November 22 on the exchanges.
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