Kaynes Technology India Ltd IPO

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i. Kaynes Technology is an end-to-end and IoT solutions enabled integrated electronics manufacturing player, having capabilities across the entire spectrum of electronics system design and manufacturing (“ESDM”) services. We have experience in providing conceptual design, process engineering, integrated manufacturing and life-cycle support for major players in the automotive, industrial, aerospace and defence, outer-space, nuclear, medical, railways, Internet of Things (“IoT”), Information Technology (“IT”) and other segments.

ii. Their business is classified based on the stage of services that we provide to our customers. They classify their operations under the following business verticals:

a. OEM – Turnkey Solutions – Box Build (“OEM – Box Build”): We undertake “Build To Print” or “Build to Specifications” of complex box builds, sub-systems and products across various industry verticals.

b. OEM – Turnkey Solutions – Printed Circuit Board Assemblies (“PCBAs”) (“OEM – Turnkey Solutions”): The company undertake turnkey electronics manufacturing services of PCBAs, cable harness, magnetics and plastics ranging from prototyping to product realization including mass manufacturing.

c. ODM: They offers ODM services in smart metering technology, smart street lighting, brush less DC (“BLDC”) technology, inverter technology, gallium nitride based charging technology and providing IoT solutions for making smart consumer appliances or devices IoT connected.

iii.  Kaynes Technology operates eight strategically located manufacturing facilities across India in the states of Karnataka, Haryana, Himachal Pradesh, Tamil Nadu, and Uttarakhand. Their facilities are located in proximity to our customers, allowing us to service their requirements efficiently and cost-effectively.

Competitive Strengths

i. Internet of Things (“IoT”) solutions enabled integrated electronics manufacturing player with end-to-end capabilities across the Electronics System Design and Manufacturing spectrum.
ii. Diversified business model with portfolio having applications across industry verticals.
iii. Long-standing relationships with marquee customer base
iv. Global certifications for each industry vertical catered to and multiple facilities across India with advanced infrastructure

Objects of the Kaynes Technology India Ltd IPO:

The Offer comprises a Fresh Issue by the Company and an Offer for Sale by the Selling Shareholders. The Company proposes to utilise the Net Proceeds towards funding the following objects: 1. Repayment/ prepayment, in full or part, of certain borrowings availed by the Company; 2. Funding capital expenditure towards expansion of our existing manufacturing facility at Mysuru, Karnataka, and near its existing manufacturing facility at Manesar, Haryana; 3. Investment in itts wholly owned Subsidiary, Kaynes Electronics Manufacturing Private Limited, for setting up a new facility at Chamarajanagar, Karnataka; 4. Funding working capital requirements of the Company; and 5. General corporate purposes.
DRHP of Kaynes Technology India Ltd IPO
RHP of Kaynes Technology India Ltd IPO

Kaynes Technology India Ltd IPO Details:

Open Date: Nov 10 2022
Close Date: Nov 14 2022
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue
Issue Size: 857.82 Cr.
Lot Size: 25 Shares
Issue Price: ₹ 559-587 Per Equity Share
Listing At: NSE,BSE
Listing Date: Nov 22 2022

Promoters And Management:

Ramesh Kunhikannan, is the Promoter and Managing Director of the Company. He has been associated with the Company since incorporation. He holds a bachelor’s degree in electrical engineering from National Institute of Engineering, Mysore. He has over 33 years of experience in the electronic manufacturing services industry. He oversees the management function of the Company and together with the senior management is responsible for the implementation of strategy in respect of such management function. Savitha Ramesh, is the Promoter, Chairperson and Whole-time Director of the Company. She has been associated with our Company since incorporation. She holds a bachelor’s degree in commerce from the University of Madras. She has over 25 years of experience in electronic manufacturing services industry. She is responsible for the overall implementation of the manufacturing process and controls compliant with different standard across the Company. Jairam Paravastu Sampath, is the Whole-time Director and Chief Financial Officer of the Company. He has been associated with the Company since 2011. He holds a bachelor of technology degree in mechanical engineering from the Indian Institute of Technology Madras and a post graduate diploma in management from the Indian Institute of Management, Ahmedabad. He has been leading the finance function of the Company during the recent years. He has over 30 years of experience in manufacturing, operations, sales and marketing. He was the vice president of TVS Group and the chief marketing officer of iPath Technologies Private Limited. He was also associated with Hindustan Motors Limited, TVS Electronics Limited and Sundaram-Clayton Limited.

Financials of Kaynes Technology India Ltd IPO:

Particulars (in crores) Jun-22 Mar 22 Mar-21
Revenue from operations 199 706 420
Finance Income 0.6 1 1
Cost of Materials Consumed 158 493 282
Change in Inventories -17 -3 3
Employee Benifit Expense 18 60 45
Other Expense 15 62 47
Operating Profit 24.4 93 42
OMP 12.2% 13.1% 10%
Finance Cost 7 25 23
Depreciation 4 13 10
0 0 2 2
Profit (Loss) before tax 13 59 10
Tax Expense 3 17 1
Profit (Loss) for the period 10 41 9
Earnings per share 2.14 8.93 2.15

Comparison With Peers:

Name of the Company CMP FV EPS P/E Mcap(cr)
Kaynes Technology India Limited 587 10 8.93 66 3415
Dixon Technologies India Limited 4,529 2 32.05 116 26,873
Amber Enterprises India Limited 2,024 10 32.41 53 6,819
Syrma SGS Technology Limited 286 10 5.59 66 5,037

Recommendation on Kaynes Technology India Ltd IPO:

Review and Recommendation of Kaynes Technology India Limited is 4/10


. 1. They build of complex box builds, sub-systems and products across various industry verticals. They also take turnkey electronics manufacturing services of PCBAs, cable harness, magnetics and plastics ranging. They also offer services in smart metering technology, smart street lighting, brush less DC (“BLDC”) technology, inverter technology, gallium nitride based charging technology and providing IoT solutions for making smart consumer appliances or devices IoT connected. 2. 25% revenue comes from OEM Turnkey projects, 62% comes from PCB Assemblies, & 10% comes from Product Engineering and IoT solutions. 3. They operate eight strategically located manufacturing facilities across India in the states of Karnataka, Haryana, Himachal Pradesh, Tamil Nadu, and Uttarakhand. Apart from this they also have a dedicated R&D facility. 4. Revenue has grown from 368 Crores in Fy20 to 706 Crores in Fy22. Gross Margins are in the range of 30-34% in the last 3 years. EBITDA Margins are in the range of 9-11% in the last 3 years. 5. PAT has grown from 9 Crores in FY20 to 41 Crores in Fy22. 6. Ramesh Kunhikannan, is the Promoter and Managing Director of the Company. He holds a bachelor’s degree in electrical engineering from National Institute of Engineering, Mysore. He has over 33 years of experience in the electronic manufacturing services industry. 7. EPS of Fy22 is 7.06 and asking P/E for the IPO is 83x. Valuation looks very stretched.

Lead Manager of Kaynes Technology India Ltd IPO:

  1. DAM Capital Advisors Ltd (Formerly IDFC Securities Ltd)
  2. IIFL Securities Ltd

Registrar of Kaynes Technology India Ltd IPO:

  1. Link Intime India Private Limited

Company Address:

Kaynes Technology India Ltd 23-25, Belagola, Food Industrial Estate, Metagalli P.O., Mysore – 570016, Phone: +91 82125 82595 Email: kaynestechcs@kaynestechnology.net Website: https://www.kaynestechnology.co.in/

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