Business strategy

Kaynes Technology Stock Lists at Premium, Rises 33% on Market Debut; Buy, Sell or Hold?

Kaynes Technology Share Price: Electronics manufacturing company Kaynes Technology India made a stellar debut on bourses today, despite recent volatility in the markets. The scrip got listed at Rs 775 on BSE, a 32.03 per cent premium over its issue price of Rs 587. The company commanded a market capitalisation of Rs 4,506.04 crore. On NSE, the scrip debuted at Rs 778, up 32.54 per cent.

The stock was earlier commanding a grey market premium (GMP) of around Rs 150 over the issue price of Rs 587 a piece, suggesting a nearly 26 per cent listing pop for the stock.

The issue consists of the issuance of fresh equity shares worth Rs 530 crore whereas existing shareholders and promoters will offload 55.84 lakh equity shares worth Rs 328 crore via offer for sale (OFS). The OFS comprises the sale of 20.84 lakh equity shares by promoter Ramesh Kunhikannan and 35 lakh equity shares by existing shareholder Freny Firoze Irani.

The company has trimmed its block for the fresh issue which was proposed to be Rs 650 crore earlier as it raised the funds via pre-IPO placement in consultation with the managers of the issue.

The net proceeds from the fresh issue will be utilised towards repayment or prepayment of certain borrowings, funding capex for expansion of existing manufacturing facilities, investments in its subsidiary, working capital needs and general corporate purposes. Also, the company plans to invest in its arm Kaynes Electronics Manufacturing Pvt Ltd for setting up a new facility at Chamarajanagar in Karnataka.

Mysore-based Kaynes Technology is a leading 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.

It has experience in providing conceptual design, process engineering, integrated manufacturing and life-cycle support for major players in the automotive, industrial, aerospace and defence, outer-space, nuclear, medical, railways, IoT, Information Technology (IT) and other segments.

The company has eight production plants in Karnataka, Haryana, Himachal Pradesh, Tamil Nadu and Uttarakhand.

What Should Investors Do?

Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd., said: “Kaynes Technology has debuted at a premium Rs.778 i.e., (32.54 per cent) over its issue price. Kaynes Technology is a leading end-to-end and IoT solutions-enabled integrated electronics manufacturing company in India. It provides conceptual design, process engineering, integrated manufacturing, and life-cycle support for major players in various industries. The company has reported strong financial growth, especially in recent years, and its margins have also improved significantly. It has a diversified business and customer profile and robust expansion in the order book.”

So, allottees who applied for the public issue for listing premium are advised to maintain a stop loss at Rs 710 and wait for further upside whereas those who have medium to long-term perspective can hold the stock maintaining a stop loss at Rs 680, he added.

Disclaimer:Disclaimer: The views and investment tips by experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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