Leading EMS player in professional electronics, Kaynes Technology has filed for a draft red herring prospectus (DRHP) with Sebi for launching its initial public offering (IPO).
The IPO including fresh issues worth ₹650 crore, while an offer for sale (OFS) of up to 72 lakh shares by shareholders.
In the OFS, promoter Ramesh Kunhikannan will offload 37 lakh equity shares, while investor Freny Firoze Irani will sell 35 lakh equity shares in the issue.
Equity shares offered in the IPO will have a face value of ₹10 each.
However, the details of the total number of shares, price band, timeline, bid lot size, and reserved portion among others will be announced in the due course.
DAM Capital Advisors and IIFL Securities are acting as the book-running lead managers for the IPO.
The company will use the net proceeds of the fresh issue for the following:
1. Repayment in full or part, of certain borrowings availed by the company. From the fresh issue, ₹130 crore will be used here.
2. ₹98.93 crore will be used for funding capital expenditure towards the expansion of the existing manufacturing facility at Mysore, Karnataka, and near the existing manufacturing facility at Manesar, Haryana.
3.Further ₹149.3 crore will be kept for investment in wholly-owned Subsidiary, Kaynes Electronics Manufacturing Private Limited, for setting up a new facility at Chamarajanagar, Karnataka.
4.About ₹114.74 crore will be used for funding the working capital requirements of the Company; and
5. General corporate purposes.
Kaynes Technology with over three decades of experience is a leading 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. It would be among the first companies in India to offer design-led electronics manufacturing to original equipment manufacturers (“OEMs”) using our mature embedded design capabilities.
The company’s revenue from operations has grown at a CAGR of 7.46% from ₹3,642.31 million in Fiscal 2019 to ₹4,206.27 million in Fiscal 2021 and was ₹4,677.75 million in the nine months ended December 31, 2021, while EBITDA has grown at a CAGR of 8.01% from ₹350.48 million as of March 31, 2019, to ₹408.91 million as of March 31, 2021, and was ₹536.54 million in the nine months ended December 31, 2021
As per the draft, the total addressable ESDM market in India was valued at ₹2.654 trillion ($36 Trillion) in Fiscal 2021 and is expected to grow to ₹9,963 Billion ($135 Billion) in Fiscal 2026 with a CAGR of 30.3%. However, the contribution of Indian ESDM companies is around 40%, which is valued at ₹1,069 Trillion ($14 Trillion) in Fiscal 2021, which is expected to grow at 41.1% CAGR to reach ₹5.978 Trillion ($81 Trillion) by Fiscal 2026.
India is positioned as a destination for high-quality design work, not merely as a low-cost alternative.