Shares of IT firm Kaynes Technology made a strong market debut today. The stock listed at ₹778 per share vs its issue price of ₹587 per share, a premium of 32.5 percent on the NSE. Meanwhile, on BSE, it listed at ₹775, a premium of 32 percent. The ₹858-crore initial public offering opened for subscription on November 10 and closed on November 14. The company had fixed the IPO price band at ₹559-587 per share.
The stock hit a high of ₹786 on NSE in intra-day deals, a premium of 34 percent to its issue price.
The IPO was subscribed 34.16 times. It got bids for 35.76 crore shares against 1.04 crore shares on offer. The portion meant for Qualified Institutional Buyers (QIBs) was subscribed 98.47 times, the non-institutional investors category got 21.21 times subscription and Retail Individual Investors (RIIs) 4.09 times.
The issue consisted of the issuance of fresh equity shares worth ₹530 crore whereas existing shareholders and promoters offloaded 55.84 lakh equity shares worth ₹328 crore via offer for sale (OFS).
The OFS comprised 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 trimmed its block for the fresh issue which was proposed to be ₹650 crore earlier as it raised the funds via pre-IPO placement in consultation with the managers of the issue.
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 provides 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.
For the year ended on March 31, 2022, it reported a net profit of ₹41.68 crore with a revenue of ₹706.25 crore. For the three months ended June 30, 2022, its net profit stood at ₹10.46 crore with a revenue of ₹199.27 crore.
The firm collected ₹257 crore from anchor investors ahead of its initial share sale. The company has allotted 43.76 lakh equity shares to anchor investors at ₹587 apiece. Nomura, Goldman Sachs, ICICI Prudential Mutual Fund (MF), Axis MF, Aditya Birla Sun Life MF, Tata MF, HDFC MF and WhiteOak Capital are among the anchor investors.
Most brokerages recommended subscribing to the issue on the back of the diversified business and customer profile as well as its robust order book.
"With an impressive 3-year CAGR Revenue/PAT growth of 38 percent/111 percent, respectively, coupled with industry-leading operating margins and robust order book of ₹2,266 crore as of 30th June, 2022, Kaynes will continue to move up the value chain," said brokerage house Anand Rathi.
It believes Kaynes is fairly priced considering its decent historical growth, strong revenue visibility and growing demand of automation across underlying industries and recommended a ‘SUBSCRIBE for long term’ rating for the IPO.