Kaynes Tech slips in trade after big bang listing. Experts see long-term prospect

Kaynes Technology, a leading end-to-end IoT solutions-enabled integrated electronics manufacturing company, listed on bourses with a bang on November 22, but the stock slipped over 11 percent as the day progressed.

Most analysts Moneycontrol spoke to suggested holding the stock but warned that it had debuted at a premium of 32 percent over the issue price.

“Healthy premium listing is justified on the back of a niche business segment with acceptable valuations for a fancy sector demand along with strong order book and unlimited export opportunity in the long run,” said Prashanth Tapse, Senior Vice President for Research at Mehta Equities. “We remain optimistic in this space and believe Kaynes Tech would do well in the long term as the industry has bright prospects.”

He mentioned that a risk-taker can hold Kaynes for some more time for higher returns with risk and investors should avoid adding more shares on the listing day itself.

The company has a diversified portfolio as well as business model having applications across automotive, industrials, aerospace and defence, medical devices, railways and internet of things (IoT).

The company has planned incremental capex towards expanding its PCBA (printed circuit board assembly) capacity in Karnataka and Haryana in existing facilities as well as a new facility in Chamarajanagar, which have a greater potential to add future revenue.

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“With a constant thrust towards product innovation and R&D and higher backward integration, the company will be able to achieve higher operational efficiency in the future. We understand investors should hold Kaynes in the portfolio for the medium to long term,” said Narendra Solanki, Head of Equity Research at Anand Rathi Shares & Stock Brokers.

The stock listed with 32 percent premium over its issue price of Rs 587. It started trading at Rs 778 on the NSE and Rs 775 on the BSE. It saw some selling after the opening tick, and fell about 11 percent from the listing price. It still trades up 18 percent over the issue price.

The Rs 858-crore IPO of the Mysuru-based company was subscribed 34 times during November 10-14. Qualified institutional investors bought shares 98 times the allotted quota, followed by non-institutional investors with 21 times subscription, retail four times and employees 12 times.

“Investors should book part listing gains on Day 1 and part within a week, considering the price movement,” said Girish Sodani, Head of Equity Market at Swastika Investmart. “It can be further purchased on dips later on for long-term investment.”

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