Kaynes Technology IPO: GMP rises as last day of issue today. Check subscription status

Kaynes Technology India Limited's (KTIL) initial public offering (IPO) opened for public subscription on Thursday, November 10, 2022 and will conclude today i.e., Monday, November 14. The price band for the issue is ₹559-587 per share. The company collected ₹257 crore from anchor investors ahead of its initial share sale. 

As of 1:25 pm on the last day, the issue has been overall subscribed 6.06 times with retail category overbooked 1.86x, employees reserved 6.33x, NIIs 7.95x and QIBs 12.15x, BSE data showed.

Kaynes Tech IPO comprises fresh issue of equity shares worth ₹530 crore and an Offer For Sale (OFS) of up to 55.85 lakh equity shares by a promoter and an existing shareholder. The OFS comprises sale of 20.84 lakh equity shares by promoter Ramesh Kunhikannan and 35 lakh equity shares by existing shareholder Freny Firoze Irani.

As per market observers, Kaynes Tech shares are available at a premium (GMP) of ₹115 in the grey market today, higher from ₹75 in the previous session. The company's shares are expected to list on November 22, 2022.

Proceeds from the fresh issue will be used to repay debt, funding capital expenditure for its manufacturing facilities at Mysore and Manesar and funding working capital requirements. The company also plans to invest in its arm Kaynes Electronics Manufacturing Pvt Ltd for setting up a new facility at Chamarajanagar in Karnataka.

“On the valuation front at the upper band of the IPO price Kaynes is demanding PE of 81.9x its TTM earnings attributable to post issue equity demanding a market cap of Rs. 34,129 million which we believe is fairly priced considering its decent historical growth, strong revenue visibility and growing demand of automation across underlying industries. We recommend ‘SUBSCRIBE for long term’ rating to this IPO,” said Anand Rathi.

Incorporated in 2008, Kaynes Technology is a leading end-to-end and IoT solutions-enabled integrated electronics manufacturing company. The company provides conceptual design, process engineering, integrated manufacturing and life-cycle support for major players.

"At higher price band, Kaynes is demanding an EV/Sales multiple of 4.1x, which is premium to the peer average. Thus the demanded valuation seems to be stretched. However considering the policy tailwinds for the EMS/ESDM sector, Kaynes’s diversified business & customer profile and robust expansion in the order book, we assign a “Subscribe with Caution" rating for the issue," said Choice Broking.