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Kaynes Technology debuts at 32% premium on exchanges, tops grey market expectations

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  • Shares of Kaynes Technology listed at ₹775 against the allotment price of ₹587 per share.
  • Overall, the IPO received strong demand from investors as it was subscribed 34.16 times.
  • The market capitalisation of the company stood at ₹4,506 crore.

Shares of Mysore-based Kaynes Technology on Tuesday listed at ₹775 per share, marking a 32% premium to an issue price of ₹587 and topping grey market expectations of a 27% premium.

Grey market premium is the premium at which initial public offering (IPO) shares are traded in an unofficial market before they are listed on the stock exchanges.

Meanwhile, the stock markets were trading flat in early trade as the Sensex rose by 8.73 points, and the Nifty50 gained 4.55 points.

The market capitalisation of Kaynes Technology stands at ₹4,506 crore, according to BSE data.

Overall, the IPO received strong demand from investors as it was subscribed 34.16 times. The qualified institutional investors portion of the IPO was subscribed 98.47 times. The retail portion, however, was subscribed four times over.

The company had raised ₹256 crore from anchor investors which included Nomura, Goldman Sachs, ICICI Prudential Mutual Fund, HDFC MF, Axis MF and WhiteOak Capital.

The IPO included a fresh issue of shares worth ₹530 crore and an offer for sale by promoters and shareholders worth ₹327 crore.

Also read: https://www.businessinsider.in/stock-market/news/kaynes-technology-ipo-allotment-tomorrow-checkout-current-gmp-value/articleshow/95560946.cms

This year, 26 IPOs made their stock market debut on the BSE mainboard. Most of them gave positive listing gains, except seven issues. Here are the top five IPOs with highest listing gains in 2022.

Companies Listing gains per share Issue price Year-to-date returns
Harsha Engineers International ₹155.90 ₹330 -15%
Dreamfolks Services ₹136.65 ₹326 -18%
Aether Industries ₹134.75 ₹642 20%
DCX Systems ₹101.80 ₹207 -16%
Syrma SGS Technology ₹93.05 ₹220 -5%

Source: BSE

Kaynes Technology is an internet-of-things (IoT) solutions-enabled integrated electronics manufacturing company.

The company’s business includes offering built-to-specification products, manufacturing printed circuit board assemblies (PCBA), making smart metres and smart street lights. Kaynes Technology also offers product engineering and IoT solutions to industries as well as common users.

The company intends to use the proceeds of the issue for repaying some of its borrowings, funding capital expenditure requirements for expanding its manufacturing capacity, and for working capital needs.

Analysts at Anand Rathi had said that at the upper price band of the IPO at ₹587 the company was demanding a price-equity multiple of 81.9 its trailing twelve-month earnings and a market cap of ₹3,412 crore. Anand Rathi said, “it is fairly priced considering its decent historical growth, strong revenue visibility and growing demand of automation across underlying industries.”

Besides, Angel One broking had raised concerns about the fact that the company was generating a majority of its revenue from its top 10 customers only. It had recommended a ‘Neutral’ rating on the issue.

Kaynes Technology noted in its red herring prospectus that in Q1 FY23, its top ten customers contributed to nearly 63% of its total revenue.

The company’s profit jumped to ₹42 crore in FY22 from ₹10 crore in FY21. Its revenue increased 68% to ₹706 crore in FY22 from ₹421 crore in FY21.

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