Kaynes Technology India Ltd IPO Review:

Kaynes Technology India Ltd Ltd incorporated on March 28, 2008, 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. The company provides 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. The company is among the first companies in India to offer design-led electronics manufacturing to original equipment manufacturers (“OEMs”). The company’s operations are classified under the following business verticals: i) OEM – Box Build, ii) OEM – PCBs, iii) ODM, and iv) Product Engineering and IoT Solutions.

Kaynes Technology India Ltd IPO Review

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Kaynes operates 8 strategically located manufacturing facilities across India in the states of Karnataka, Haryana, Himachal Pradesh, Tamil Nadu, and Uttarakhand. Their operations comply with global standards and their facilities have 10 global accreditations, making them the most certified ESDM company in India. In nine months ending June 30, 2022, The company served 229 customers in 21 countries globally and multiple industry verticals such as automotive, aerospace and defense, industrial, railways, medical, and IT / ITES. The company works with over 871 vendors and sources materials from various regions including North America, Europe, and Singapore as well as locally within India, As of June 30, 2022.

Promoters & Shareholding:

Ramesh Kunhikannan, Savitha Ramesh, and RK Family Trust are the company promoters.

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Public Issue Details:

Offer for sale: OFS of approx. 5,584,664 equity shares at Rs. 10, aggregating up to Rs. 327.82 Cr and fresh of approx. 9,028,960 equity shares at Rs. 10, aggregating up to Rs. 530 Cr.

Total IPO Size: Rs. 857.82 Cr.

Price band: Rs. 559 – Rs. 587.

Objective: For repayment/ prepayment of borrowings, funding capital expenditure, Investment in the wholly owned Subsidiary, and funding working capital requirements.

Bid qty: minimum of 25 shares (1 lot) for Rs. 14,675 and maximum of 13 lots.

Offer period: 10th Nov 2022 – 14th Nov 2022.

Date of listing: 22nd Nov 2022.


  • The company is an Internet of Things (IoT) solutions-enabled integrated electronics manufacturing player with end-to-end capabilities across the electronics system design and manufacturing spectrum.
  • It has a diversified customer base.
  • The company has global certifications for each industry vertical catered to and multiple facilities across India with advanced infrastructure.
  • Diversified business model.
  • Professional and experienced management team.


  • The business does not have firm commitment agreements with all of the customers.
  • Significant working capital requirements.
  • Instances of non-compliance in the past.
  • The increasing competition in the electronics system design and manufacturing industry may create pressures on pricing and market share.

Subscribe or avoid?

Sectorial outlook – The global ESDM market was estimated at $804 billion in 2020 and is expected to reach $1,002 billion in 2025 at a growth rate of 4.5%. The global ESDM market witnessed a period of steady growth till 2018, riding on the wave of increased outsourcing activities from OEMs and increasing electronics content. However, in 2019, the opportunities started stagnating due to a multitude of factors, firstly, due to a decline in global automotive sales and saturation of consumer electronics sales, and secondly, due to supply chain restrictions as a result of heightened trade tensions between the US and China. The Indian electronics consumption market is estimated to be $80 billion in Fiscal 2021, with a growth rate of 18.4% expected to reach $186 billion by Fiscal 2026. India contributes to approximately 1.8% of the global ESDM market in 2020. However, there is a strong push from the GoI to make India an ideal location for electronics manufacturing in the region. Under the NPE, India announced various 164 programs in 2019, including EMC 2.0, to enhance the infrastructure of electronics manufacturing and offer incentives to manufacture more products that promote the industry in India. All of the above are expected to have a positive impact on the sector the company is operating in the long term.

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The financials (revenue and net profit) are shown in the graph below:

Valuation – For the last 3 years average EPS is Rs. 4.4 and the P/E is around 131x on the upper price band of Rs. 587. The EPS for FY22 is Rs. 8.93 and the P/E is around 65.7x. If we annualize Q1-FY23 EPS of Rs. 2.11, P/E is around 69x. It has Syrma SGS Technology Ltd (66.8x), Dixon Technologies Ltd (116x), and Amber Enterprises India Ltd (52.8x) as its listed peers as per the RHP. The company’s P/E is between 65.7x and 131x. Revenue has been growing consistently and the net profit has improved.

Recommendation – The Company has capabilities across the entire spectrum of electronics system design and manufacturing services and has established long-term relationships with well-known customers across the industries it caters to. The valuation seems in line with the other companies in the sector but on a standalone basis, it seems a little expensive. After considering all the factors the listing still seems a little expensive with good prospects but in the current market condition we would recommend investors to wait for now and Buy on dips post listing


This article should not be construed as investment advice, please consult your Investment Adviser before making any investment decision.

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