Kaynes Technology, a leading electronics manufacturing company integrating end-to-end and IoT solutions, will launch an initial public offering (IPO) on November 10.

Subscriptions will be available for this issue on Thursday, November 10, and the last day for public subscription subscriptions is Monday, November 14. The price range of the offer is fixed at Rs 559 to 587 per share with a face value of Rs 10.

The company serves the automotive, industrial, aerospace and defence, outer space, nuclear, medical, rail, Internet of Things (IoT), information technology (IT) and other segments.

Through this IPO, the company aims to raise approximately 860 crores and the public offering consists of a fresh issue of shares worth Rs 530 crores and an offer-for-sale (OFS) of 55.84 lakh shares, taking an overall total of approximately 327.82 crores by the promoter and investor.

Promoter Ramesh Kunhikannan will sell 20.84 lakh shares through OFS and the remaining 35 lakh shares will be sold by investor Freny Firoze Irani. The company has reserved shares worth Rs 1.5 crore for its employees.

After this issuance, the promoter’s shareholding ratio will drop by 12.39%, and the company’s current 79.78% stake will be reduced to 67.39%. Of the total offer, 50% of the net offer will be reserved for qualified institutional buyers, 15% for non-institutional investors, and the remaining 35% for retail investors.

The company will not receive any benefit from the OFS part. Of the net proceeds from the new issue, about Rs 149 crore will be invested in a subsidiary to set up a new facility, Rs 130 crore will be used to repay/advance certain borrowings, and Rs 115 crore will be used to meet working capital requirements of Rs 99 crore The rupee will be used to fund capacity expansion of existing manufacturing facilities.

The minimum lot size that investors can bid is 25 shares and their multiples. The minimum investment for retail investors is Rs 14,675 in a price range of 25 shares. Retail investors can apply for up to 13 lots or 325 shares for an amount of Rs 1,90,775.

Kaynes Technology operates eight manufacturing plants in the Indian states of Karnataka, Haryana, Himachal Pradesh, Tamil Nadu and Uttarakhand.

The domestic addressable electronic system design and manufacturing (ESDM) market totalled Rs 2,654 billion in FY21 and is expected to grow at a CAGR of 30.3% in FY21-26 to reach Rs 99,630 crore by FY26. According to RHP, the contribution of domestic ESDM companies is expected to improve to 41.1% in FY26, compared to about 40% in FY21.

According to the Electronics Industry Association of India, there are nearly 700 companies providing services related to the design and manufacture of electronic products. While most companies provide pure manufacturing/assembly services (also known as EMS companies), dedicated ESDM companies, such as Kaynes, provide services across the value chain, including conceptual product design, components, products, and solutions.

Whereas EMS companies only offer “manufacture-to-print” of printed circuit board assemblies (PCBAs) or complete products, ESDM companies use their conceptual “embedded design” capabilities to add value to electronics manufacturing.

As of FY22, the automotive and industrial sectors contributed 33.6% and 29.8% to the company’s business, while the medical, rail and consumer sectors accounted for 10.1%, 10.4% and 8.4% of Kaynes’ revenue, respectively. IoT business accounted for 5.3% of total revenue in FY22.

With the increasing demand for its products, the company reported a CAGR of around 63% to Rs 1,517 crore in FY19-22. Orders further increased to Rs 2,266 crore in Q1FY23, about 3.2x FY22 revenue.

Kaynes’ greatest strength is that it is an integrated electronics manufacturer, enabling IoT solutions, with end-to-end capabilities across the ESDM spectrum. It has a diversified business model, its product portfolio has cross-industry vertical applications, and it has established long-term partnerships with a large customer base.

Another major advantage of the company is that it has global certifications and a strong supply chain and sourcing network for every vertical industry it serves. At the same time, these concerns include delays in planned capacity expansion and an unfavourable sales mix and sales realisation.

The company raised Rs 256.89 crore via anchor book on November 9, with participation from 28 investors ahead of the IPO. After negotiations with commercial bankers, the company finally allocated 43.76 lakh shares to anchor investors at an average price of Rs 587 per share.

Participants include Volrado Venture, Nomura Trust, Public Sector Pension Investment Committee, Goldman Sachs Funds, ICICI Prudential, Nippon Life India, Axis Mutual Funds, Eastspring Investments India, HDFC Trustee, Aditya Birla Sun Life, Malabar India Fund, Whiteoak Capital, Mirae Asset, Abakkus Emerging Opportunities Fund, Franklin India and Tata Mutual Fund buy stocks through anchor books.

According to IPO Watch, the company’s shares are currently trading at a premium of Rs 15 per share in the grey market, while according to IPO Central, there is no premium and investors are unlikely to receive any listing gains. Both IPO Watch and IPO Central track grey market movements.

Shares will be distributed to winning bidders on November 17, and refunds to unsuccessful bidders will be credited to their accounts on November 18. Shares will be credited to the winning bidder’s demat account on November 21, and shares will be credited on November 22.