Kaynes Technology IPO: GMP, key points. Should you subscribe or skip as issue kicks off today?

As of 2 pm on day 1, the issue has been subscribed 0.05x with employees reserved category fully booked 1.14 times, retail category 0.07x, NIIs 0.03x, BSE data showed.

As per market observers, Kaynes Tech shares are available at a premium (GMP) of ₹75 in the grey market today. The company's shares are expected to list on November 22, 2022.

Kaynes Tech IPO comprises fresh issue of equity shares worth ₹530 crore and an Offer For Sale (OFS) of up to 55.85 lakh equity shares by a promoter and an existing shareholder. The OFS comprises sale of 20.84 lakh equity shares by promoter Ramesh Kunhikannan and 35 lakh equity shares by existing shareholder Freny Firoze Irani.

"At higher price band, Kaynes is demanding an EV/Sales multiple of 4.1x, which is premium to the peer average. Thus the demanded valuation seems to be stretched. However considering the policy tailwinds for the EMS/ESDM sector, Kaynes’s diversified business & customer profile and robust expansion in the order book, we assign a “Subscribe with Caution" rating for the issue," said Choice Broking.

Proceeds from the fresh issue will be used to repay debt, funding capital expenditure for its manufacturing facilities at Mysore and Manesar and funding working capital requirements. The company also plans to invest in its arm Kaynes Electronics Manufacturing Pvt Ltd for setting up a new facility at Chamarajanagar in Karnataka.

"Kaynes Technology is a leading player in end-to-end and IoT-enabled integrated electronics manufacturing. Kaynes served over 229 customers in 21 countries and multiple industry verticals including automotive, aerospace and defence, industrial, railways, medical, and information technology. Both profits and revenues are increasing significantly. However, at the upper band of issue price, the asking p/e is 83x (post fresh issue), while P/BV is close to 13 times which makes the issue look fully priced," said Abhay Doshi, co-founder at UnlistedArena.

Incorporated in 2008, Kaynes Technology is a leading end-to-end and IoT solutions-enabled integrated electronics manufacturing company. The company provides conceptual design, process engineering, integrated manufacturing and life-cycle support for major players.