Kaynes Technologies looks set to make a strong market debut on Tuesday. Last heard, the stock was 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 GMP for Kaynes Technologies stood in the Rs 200-230 range in the past few days.
The Rs 857.82 crore IPO, which ran from November 10 to November 14, got 34.22 times bids. The quota reserved for qualified institutional buyer was subscribed 98.47 times. The portion reserved for non-institutional investors was subscribed 21.21 times bids. Employee portion was subscribed 11.89 times while the retail portion saw a subscription of 4.09 times. The issue price is set at Rs 587 apiece.
At the issue price, the PE of Kaynes Technologies stood at 69 times FY22 EPS, which was in line with its listed peers such as Amber Enterprises and Syrma SGS Technology.
Kaynes Technology is an end-to-end and IoT solutions enabled integrated electronics manufacturing player. It was one of the first companies to offer design-led electronics manufacturing to original equipment manufacturers (OEMs). Kaynes had an order book of Rs 2,266.26 crore as of June 30.
In the listed space, Kaynes Technology competes with Dixon Technologies India, Syrma SGS Technology and Amber Enterprises India. Kaynes Technology has eight strategically located manufacturing facilities in India, in the states of Karnataka, Haryana, Himachal Pradesh, Tamil Nadu, and Uttarakhand.
Kaynes had a combined capacity to assemble over 1,500 million on an annualised basis, as of June 30, 2022.
In its bull case scenario, Ventura Securities assumed Kaynes’ FY25 revenues at Rs 1,800 crore (FY22-25 CAGR of 36.6 per cent), net margin at 9 per cent and FY25 PE at 32 times, to arrive at a target of Rs 892 per share, which suggest a possible 51.9 per cent upside from the issue price.
In its bear case scenario, it pegs FY25 revenues at Rs 1,300 crore (FY22-25 CAGR of 22.6 per cent), net margin at 8 per cent and FY25 PE at 27 times, to suggest a target of Rs 483 per share, suggesting a potential downside of 17.7 per cent from the issue price.
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