Despite recent market turbulence, electronics manufacturing business Kaynes Technology India achieved a fantastic launch on bourses today, in accordance with expert forecasts.
The stock was listed at a premium of 32% above its initial issue price of Rs 587. On the NSE and BSE, it opened trading at Rs. 778 and Rs. 775, respectively.
During the period of November 10–14, 34.16 times more people subscribed to the Rs 858–crore IPO of the Mysuru–based company that offers a wide range of electronics system design and manufacturing (ESDM) services.
Qualified institutional investors purchased shares 98.47 times the quota granted, followed by retail investors with a subscription of 4.10 times, non-institutional investors with a subscription of 21.21 times, and employees with a subscription of 11.92 times.
Kaynes Technology operates eight manufacturing facilities across India in the states of Karnataka, Haryana, Himachal Pradesh, Tamil Nadu and Uttarakhand.
The total domestic addressable electronics system design and manufacturing (ESDM) market was at Rs 2,65,400 crore in FY21, and it is expected to average a 30.3 percent annual growth rate in the five years from FY21 to reach a size of Rs 9,96,300 crore in FY26. As per the company’s RHP, the contribution from the domestic ESDM companies is expected to improve to 41.1 percent by FY26, compared to around 40 percent in FY21.
According to analysts, the company’s key strength is its diversified business model with a portfolio of applications across industry verticals, especially defence, and long-standing relationships with a marquee customer base.
Kaynes Technology will use the proceeds from the fresh issue for repaying debt, expansion of existing manufacturing facilities at Mysuru (Karnataka) and Manesar (Haryana), investment in a subsidiary and setting up a new facility at Chamarajanagar (Karnataka).
“The incremental capex planned towards expanding its PCBA (printed circuit board assembly) capacity will have a greater potential to adding future revenue,” Narendra Solanki, head, equity research, at Anand Rathi Share and Stock Brokers, said.
