Kaynes Technology gets Sebi's go ahead to float IPO to raise funds

Kaynes Technology India Limited (KTIL) has received capital markets regulator Sebi's go ahead to raise funds through an Initial Public Offering (IPO).

The IPO consists of a fresh issue of equity shares aggregating to Rs 650 crore, and an Offer For Sale (OFS) of up to 72 lakh equity shares by a promoter and an existing shareholder, according to the Draft Red Herring Prospectus (DRHP).

The OFS comprises sale of up to 37 lakh equity shares by promoter Ramesh Kunhikannan and up to 35 lakh equity shares by existing shareholder Freny Firoze Irani.

The company, which filed preliminary IPO papers with Sebi in April, obtained its observations letter on October 6, an update with the regulator showed on Monday.

In Sebi's parlance, the observation implies its go ahead to launch IPO.

Going by the draft papers, proceeds from the fresh issue worth Rs 130 crore will be used to repay debt and Rs 98.93 crore will be utilised for funding capital expenditure for its manufacturing facilities at Mysore and Manesar.

Also, the company plans to use Rs 149.30 crore towards investment in its arm Kaynes Electronics Manufacturing Pvt Ltd for setting up a new facility at Chamarajanagar in Karnataka. It will use up to Rs 114.74 crore for funding working capital requirement and general corporate proposes.

Mysore-based Kaynes Technology is a leading end-to-end and IoT (Internet of Things) solutions-enabled integrated electronics manufacturing player, having capabilities across the entire spectrum of electronics system design and manufacturing services.

It has 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, IoT, Information Technology (IT) and other segments.

The company has eight production plants in Karnataka, Haryana, Himachal Pradesh, Tamil Nadu and Uttarakhand. It has a total capacity of approximately 600 million components as of December 2021.

For FY21, the company posted a revenue of Rs 420.63 crore as against Rs 368.24 crore in the preceding fiscal. Net profit for the period under review was at Rs 9.73 crore as compared to Rs 9.35 crore in the previous financial year.

DAM Capital Advisors and IIFL Securities are the book-running lead managers to the issue.