Kaynes Technology makes a bumper debut, lists at 32% premium over issue price

In line with analyst expectations, electronics manufacturing company Kaynes Technology India made a stellar debut on bourses today, despite recent volatility in the markets.

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.

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The Rs 858-crore IPO of the Mysuru-based company providing a diverse array of electronics system design and manufacturing (ESDM) services was subscribed 34.16 times during November 10-14.

Qualified institutional investors bought shares 98.47 times the allotted quota, followed by non-institutional investors with 21.21 times subscription, retail 4.10 times and employees 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 Rs 2,65,400 crore in FY21, which is expected to average 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 FY21.

According to analysts, the company’s key strength is its diversified business model with portfolio having applications across industry verticals, especially defence, and long-standing relationships with marquee customer base.

Kaynes Technology will be using the proceeds from 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.