Kaynes Technology IPO: Issue subscribed 34.16 times on final day of bidding

The initial public offering (IPO) of Mysore-based Kaynes Technology India Ltd on Monday subscribed 34.16 times on the final day of bidding. The issue attracted bids for 35,76,21,075 crore equity shares against the IPO size of 1,04,70,246 shares.

The quota for qualified institutional buyers (QIBs) got subscribed 98.47 times while the category for non-institutional investors witnessed 21.21 times subscription. The portion for retail individual investors (RIIs) received 4.09 times subscription and that for employees got subscribed 11.89 times.

The end-to-end and IoT (Internet of Things) solutions-enabled integrated electronics manufacturer fixed the IPO price band at Rs 559-587 per share. The company had raised Rs 257 crore from anchor investors ahead of its IPO.

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Grey market premium

Market participants said Kaynes Technology IPO grey market premium (GMP) is around Rs 132. It implies that the grey market is expecting the lender to list around Rs 719 (Rs 587 + Rs 132), which is more than 22 per cent higher than the IPO's upper band price of Rs 587 per equity share.

"Kaynes serves more than 229 customers in 21 countries around the world and spans multiple industries including automotive, aerospace, defence, industrial, rail, medical and IT. Both sales and profits have increased significantly. However, in terms of valuation, the price/earnings ratio at the upper end of the issue price band is 83x (post-fresh issue), and the price to book value ratio is close to 13x," Manan Doshi, UnlistedArena.com, told Business Today. The IPO looked pricey, he added.

Brokerage view

Hem Securities has a 'subscribe' rating on the issue.

Angel One recommended a 'Neutral' rating on the issue."

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Choice Broking assigned a 'Subscribe with Caution' rating.

The company said proceeds from the fresh issue would be used to repay debt, fund capital expenditure for its manufacturing facilities at Mysore and Manesar and working capital requirements.

DAM Capital Advisors and IIFL Securities were the book-running lead managers to the IPO.