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Issue open for public subscription; here’s what you need to know

Kaynes Technology IPO GMP today: The initial public offering (IPO) of Kaynes Technology India, an IoT solutions-enabled integrated electronics manufacturing company, opened for subscription on Thursday, November 10, 2022. It opened for public subscription at 10 am and was subscribed around 5 per cent by 2:39 pm on the first day of bidding.

It received total bids for 5,73,575 shares across both the stock exchanges against 1,04,70,246 shares on offer, data from National Stock Exchange (NSE) showed.

The Rs 3,413 crore Kaynes Technology IPO will be available for subscription till Monday, November 14, 2022, and the price band of the company has been fixed at Rs 559-587 per share.

Kaynes Technology IPO comprises a fresh issue of Rs 530 crore and an offer for sale of up to 55,84,664 equity shares.

The OFS comprises sale of 20,84,664 equity shares by promoter Ramesh Kunhikannan and 35,00,000 equity shares by existing shareholder Freny Firoze Irani.

The net proceeds from the fresh issue will be used for repayment/prepayment of certain borrowings availed by the company, funding capital expenditure towards the expansion of the existing manufacturing facility at Mysuru, Karnataka, and near their existing manufacturing facility at Manesar, Haryana, investment in their wholly owned subsidiary Kaynes Electronics Manufacturing Pvt Ltd, setting up a new facility at Chamarajanagar, Karnataka, funding working capital requirements of the company and general corporate purposes, as per the information provided in the red herring prospectus (RHP).

Half of the issue size has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and the remaining 35 per cent for retail investors.

Mysore-based Kaynes Technology India is an end-to-end and IoT (Internet of Things) solutions-enabled integrated electronics manufacturing player, having capabilities across the entire spectrum of electronics system design and manufacturing services.

As of June 2022, the company has eight manufacturing facilities, one design facility, two service centers and one packaging and dispatch facility in Karnataka, Haryana, Himachal Pradesh, Tamil Nadu, Uttarakhand, Kerala and Maharashtra.

Investors who wish to subscribe to Kaynes Technology IPO can bid in a lot of 25 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,675 to get a single lot of Kaynes Technology India. The shares will be listed on both BSE and NSE.

The applicants also must note that the cut-off time for UPI mandate acceptance is Monday, November 14, 2022, upto 5:00 pm, the last day of IPO bidding. Further bids with confirmed status of mandate amount blocked (RC100) shall be considered as valid applications and hence, investors are advised to submit their UPI applications in IPO well in advance to avoid any last minute technical/systemic constraints that may hamper their ability to participate in IPOs by successfully accepting the mandate.

DAM Capital Advisors and IIFL Securities are the book-running lead managers to the offer while Link Intime India is the registrar of the issue.

Before heading into the IPO, Kaynes Technology India on Wednesday raised over Rs 255.89 crore (Rs 2,56,89,59,127) from 28 anchor investors in lieu of 43,76,421 equity shares at Rs 587 each, data from the stock exchanges showed.

The anchor investors include Nomura, Goldman Sachs, ICICI Prudential Mutual Fund (MF), Axis MF, Aditya Birla Sun Life MF, Tata MF, HDFC MF and Aditya Birla Sun Life Insurance Company among others.

The research teams at Reliance Securities and PhillipCapital (India) in their respective IPO notes have given a “Subscribe” rating to the offer.

Reliance Securities in its IPO note said, “Based on the FY22 earnings, the company is valued at 82x P/E, 38x EV/EBITDA and 5x EV/Sales. The company is IoT solutions enabled with end-to-end capabilities across the ESDM spectrum. The company aims to implement comprehensive backward integration measures by manufacturing in-house components and get into deep competencies in design of integrated circuits and chip sets. In view of strong financials, diversified business model, long-standing relationships with marquee customers, global certifications, strong supply chain and sourcing networks, we recommend ‘SUBSCRIBE’ to the issue.”

The share allotment is likely to take place on Thursday, November 17, 2022, and the shares are expected to be listed on Tuesday, November 22, 2022, according to the timeline given in the RHP.

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