Analyzing Kaynes Technology’s IPO Valuation and GMP
Kaynes Technology, a Bengaluru-based electronic manufacturing services company, is all set to enter the capital market with an initial public offering (IPO) on August 10, 2021. The issue comprises a fresh issue of up to Rs 60 crore and an offer for sale (OFS) of up to 75 lakh equity shares by the promoter and investor selling shareholders.
Let’s take a closer look at Kaynes Technology’s IPO valuation and grey market premium (GMP) to analyze its potential.
IPO Valuation
Kaynes Technology’s IPO issue price has been fixed at Rs 152- Rs 160 per share. The face value of each share is Rs 10. The price band seems reasonable considering Kaynes Technology’s strong financial performance and the overall demand for electronic manufacturing services in India.
As of March 2021, the company reported a total revenue of Rs 917.81 crore and a net profit of Rs 61.01 crore. Its revenue has grown at a CAGR of 36.1% from FY19 to FY21, while its net profit has grown at a CAGR of 96.1% during the same period. These growth rates are impressive, and if Kaynes Technology can maintain this momentum, it has the potential to create substantial value for its investors.
Grey Market Premium (GMP)
The GMP for Kaynes Technology’s IPO is hovering around Rs 90, which is over 50% of the upper band price of Rs 160 per share. This exorbitant GMP reflects the market’s confidence in Kaynes Technology and its growth prospects.
However, it’s important to note that GMP is an unofficial market created by unauthorized entities, and it may not always be accurate. Therefore, investors must take the GMP with a grain of salt and do their due diligence before investing.
Final Thoughts
Kaynes Technology’s IPO seems promising, considering its financial performance and growth prospects. The IPO price band is reasonable, and the grey market premium indicates strong investor demand. However, investors should always do thorough research before investing in any IPO to avoid any potential risks.
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