Kaynes Technology India Ltd IPO is coming up this week. The company filed DRHP with market regulator SEBI on April 13, 2022. SEBI approved Kaynes Technology India Ltd IPO of a fresh issue of INR 650 crores and up to 7,200,000 Equity Shares offer for sale (OFS). The face value of each equity share will be INR 10 per equity. The promoter of the company Ramesh Kunhikannan is selling up to 3,700,000 Equity Shares and the investor Freny Firoze Irani is selling up to 3,500,000 Equity Shares in the process as OFS.
Utilization of Net Proceeds from Kaynes Technology India Ltd IPO
The company will not receive any amount from the offer for sale. However, the company will utilize the net proceeds from the fresh issue of Kaynes Technology India Ltd IPO as below.
- The company will repay or prepay INR 130 crores to reduce its borrowings.
- It is also planning to fund INR 98.93 crores to expand its existing manufacturing facility at Mysore, Karnataka, and Manesar, Haryana.
- The company will also invest INR 149.3 crores in its subsidiary Kaynes Electronics Manufacturing Private Limited, for setting up a new facility at Chamarajanagar, Karnataka.
- The rest of the fund (INR114.7 crores) will be used to meet working capital requirements and general corporate purposes.
Kaynes Technology India Ltd – Company Overview
The company was incorporated as ‘‘Kaynes Technology India Limited” in Mysore, Karnataka, India on March 28, 2008. To become the public company before IPO, the name changed to “Kaynes Technology India Limited” on March 31, 2022, and a certificate of change of name was issued by the RoC. The registered and corporate office is in Belagola, Food Industrial Estate, Metagalli P.O., Mysore – 570016, Karnataka, India.
- Kaynes Technology India Limited is a leading end-to-end and IoT solutions-enabled integrated electronics manufacturing player.
- Have capabilities across the entire spectrum of electronics system design and manufacturing (“ESDM”) services.
- The company has three decades of experience in providing conceptual design, process engineering, integrated manufacturing, and life-cycle support.
- The products of the company cater to the major players in the automotive, industrial, aerospace and defense, outer-space, nuclear, medical, railways, Internet of Things (“IoT”), Information Technology (“IT”), and other segments.
- Over 35 years of experience in this business with over 300 customers across 20 countries.
- The company has 8 manufacturing plants and 2 service centers.
- Long-term relationship with customers. Over 40% of its customers associated for over seven years.
Kaynes Technology India Ltd Products/ Services
The company offers various services under different business verticals
- OEM – Box Build: “Build to Specifications” of complex box builds, sub-systems, and products across various industry verticals. Approximately 30.34% of total revenue comes from this segment in FY21.
- OEM – Printed Circuit Board Assemblies ranging from prototyping to product realization including mass manufacturing. About 59.65% of total revenue comes from this segment in FY21.
- ODM (Original design manufacturers) services in smart metering technology, smart street lighting, brushless DC, etc. Around 4.38% of revenue earned from this segment in FY21.
- Product Engineering and IoT solutions include PCB cladding or electrical schematics to embedded design and submitting proof of concept to prototyping. Around 5.63% of revenue earned from this segment in FY21.
Founders of Kaynes Technology India Ltd
Mr. Ramesh Kunhikannan is the Promoter and Managing Director of the Company. He has over 33 years of experience in the electronic manufacturing services industry. He holds a bachelor’s degree in electrical engineering from the National Institute of Engineering, Mysore.
Mr. Jairam Paravastu Sampath is the Whole-time Director and Chief Financial Officer of the Company. He holds a bachelor of technology degree in mechanical engineering from the Indian Institute of Technology Madras and a post-graduate diploma in management from the Indian Institute of Management, Ahmedabad.
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Kaynes Technology India Ltd – Revenue and profits
The total income of the company has been growing over the years. The company’s revenue from operation was INR 4,677.75 million for the 9 months of FY 2022 as against INR 4,206.27 million for the full year of FY 2021. The revenue from operations grew by 15.5% from FY 2019 to FY 2021. Kaynes Technology India Ltd incurred a positive return over the three years from FY19 to FY21 and also for the 9 months of FY22. PAT for the 9 months of FY22 is INR218.23 million as against INR 97.33 million in FY21 (full year). This reflects the company earnings have been improving YoY.
Kaynes Technology India ltd IPO details – Valuation Parameters
Kaynes Technology India Ltd earns positive net cash flow from operating activities. The Net cash flow from operating activities has increased over the years mentioned. The ROE is about 10% over the years while ROCE is around 13%. Refer to the table below for more financial details.
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Kaynes Technology India Ltd IPO – Financial Details
| All amounts in INR Million (Year ended March 31) | 2019 | 2020 | 2021 |
|---|---|---|---|
| Revenue Operation | 3,642.31 | 3,682.38 | 4,206.27 |
| Total Income | 3,665.97 | 3,701.66 | 4,246.63 |
| Gross Margins | 33.65% | 34.37% | 31.98% |
| EBITDA | 350.48 | 413.33 | 408.91 |
| EBITDA Margin | 9.62% | 11.22% | 9.72% |
| Profit after tax | 97.28 | 93.55 | 97.33 |
| Earnings Per Share-Diluted | 2.38 | 2.32 | 2.15 |
| Net Cash from Operating Activities | 75.81 | 452.47 | 277.30 |
| Debt-Equity Ratio | 1.84 | 1.5 | 1.02 |
| Return on Equity Percentage | 11.46% | 10.51% | 8.08% |
| Return on Capital employed | 12.94% | 14.42% | 13.47% |
| Total Borrowings | 1,556.38 | 1,438.27 | 1,394.67 |
| Total Assets | 3,633.03 | 3,781.15 | 4,193.67 |
Kaynes Technology India Ltd IPO details: Do you invest? 10 factors to know
- Demand for IoT-enabled devices is high across the globe. The company is a leading end-to-end and IoT solutions-enabled integrated electronics manufacturing player and will benefit from this trend.
- The printed circuit board is the major segment of the company and will benefit from the increasing demand for electronic devices.
- The government of India is focusing on the Make in India concept and pushing the PLI scheme for the manufacturing sector. Kaynes Technology India is a leading player in manufacturing services.
- Kaynes Technology India Limited will reduce its debt by repaying INR130 Crores. Total borrowing of INR 139.5 crores.
- Consistently performing well financially, however, PAT should increase further.
- Strong order book
- The company is also expanding its business through its subsidiaries where it will invest INR 248 crores.
- Diversified business model, products cater to across industries. Railways, Industrial products, and the Automotive sector are major applications of its products.
- Long-term relationships with well-known customers across industries, focusing on expanding customer base.
- However, the North American and European economies, contributing about 80% of the total revenue, are slowing down. That will hurt the company’s earnings.
- The company is planning for inorganic growth opportunities through selective strategic acquisitions and partnerships.
- Overall, the company is good with certain risk factors I mentioned above.
- I would love to invest in the company for long term gain.
Kaynes Technology India Ltd IPO Details
| Kaynes Technology India Ltd IPO Details | Details |
|---|---|
| Kaynes Technology IPO Date | November 10, 2022 to November 14, 2022 |
| Kaynes Technology IPO Price band | INR 559 to INR 587 |
| Kaynes Technology IPO Allotment date | November 17, 2022 |
| Refunds Initiation date | November 18, 2022 |
| Credit of Shares to Demat Account | November 21, 2022 |
| Kaynes Technology India Ltd IPO Listing Date | November 22, 2022 |
| Kaynes IPO Fresh Issue | INR650 Crores |
| Kaynes IPO Offer for Sale | 7,200,000 Equity Shares |
| Equity Shares outstanding prior to the Offer | 46,799,496 Equity Shares |
| Minimum bid (lot size) | 25 shares |
| Minimum bid amount | INR 14,675 |
| Maximum bid amount | INR 190,775 |
| Kaynes IPO Face Value | INR 10 per share |
| Listing on | BSE & NSE |
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Head office and lead managers of the Kaynes Technology India Ltd IPO
| Contact Details | Lead Managers |
| 23-25, Belagola, Food Industrial Estate, Metagalli P.O., Mysore – 570016, Karnataka, India Tel: +91 82125 82595 Email: kaynestechcs@kaynestechnology.net www.kaynestechnology.co.in | 1. DAM Capital Advisors Limited 2. IIFL Securities Limited |
Kaynes Technology IPO Allotment Status
Kaynes Technology IPO allotment will be available on Link Intime’s website. To know your allotment status, get ready with your PAN number and click on this link.
Kaynes Technology IPO GMP
| Date | Kaynes Technology IPO GMP | IPO Price |