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About the company
Kaynes Technology is an end-to-end and IoT(Internet of things) solutions-enabled integrated electronics manufacturing player, having capabilities across the entire spectrum of the electronics system design and manufacturing (ESDM) industry. The ESDM industry includes electronic products, electronic components, semiconductor design, and electronics manufacturing.
Incorporated in 2008, the company classifies its business operations under the following verticals –
OEM - Printed Circuit Board Assemblies (PCBA): Electronics manufacturing services of PCBAs, cable harnesses, magnetics, and plastics ranging from prototyping to product realization including mass manufacturing.
OEM - Box Build: In this process, all the sub-assemblies are assembled together to get a final product which is then tested and packaged for shipment.
ODM: Services in smart metering technology, smart street lighting, brushless DC (“BLDC”) technology, inverter technology, gallium nitride-based charging technology, and providing IoT solutions for making smart consumer appliances or devices IoT connected.
Product Engineering and IoT solutions: The company leverages the latest technologies including IoT, big data, machine learning, cloud, and media to improve customers’ efficiency.
The company operates across industries like Automotive, Industrial, IoT / IT, Aerospace, Defence, Medical, Railways, etc. The company earns 19.99% of its Revenue from operations from Exports. Top 10 customers contribute to 51.02% of the Total Revenue from operations.
Objects of the offer
The total issue of Rs. 857.82 Cr. consists of Rs. 530 Cr. fresh issue and an offer for sale of Rs. 327.82 Cr. Proceeds from the issue will be utilized for Repayment/prepayment, in full or part, of certain borrowings, availed of by the Company, funding capital expenditure towards the expansion of the existing manufacturing facility, Investment in the wholly owned Subsidiary, Kaynes Electronics Manufacturing Private Limited, and Funding working capital requirements of the Company.
The company’s revenue grew by 24.24% in the last 3 years while PAT grew by 64.54% in the same period. As on June 30, 2022, the company’s order book was Rs. 22,662.64 million. The value of each customer order has been increasing from an average order size of Rs. 1.49 million in Fiscal 2020 to an average order size of Rs. 5.53 million in Fiscal 2022, at a CAGR of 92.44%.
Peer comparison and IPO valuation
Company P/E at the highest price band is 65.73. The lowest P/E in the peer group is Amber Enterprises India Ltd. at 61.72. The company enjoys the second-highest RONW. ROE and ROCE are the highest among peers. Based on P/E multiple the company is fairly valued.
Risks & Litigations
1. The company has 8 manufacturing facilities of which the top 3 facilities account for 81.53% of the revenue from operations.
2. The imported raw materials accounted for 64.46% of the total purchases of raw materials in Fiscal 2022. The company relies on a constant supply of semiconductors from overseas markets for manufacturing our products.
IPO Details & Subscription status
1. The IPO starts on 10th November and will end on 14th November 2022. The issue size is Rs. 857.82 Cr. The lot size will be 25 shares and a retail investor can apply for a maximum of 13 lots. The price band offered by the company is Rs. 559-587 per share.
2. The company has done a pre-IPO placement of Rs. 130.00 cr. (23,38,760 shares) at a price of Rs. 555.85 per share in October 2022
3. As of releasing the blog (11th November 2022, 4:00 pm), the IPO was subscribed 0.78 times, and the GMP was Rs. 87.