Kaynes Technology, a recently listed company, has made significant strides in its fundraising efforts and expansion plans. The company has launched a Qualified Institutional Placement (QIP) to raise funds, with a target of ₹1,400 crore. Additionally, Kaynes Technology has announced the acquisition of US-based electronic manufacturing services company Digicom Electronics for a cash consideration of $2.5 million.
QIP Raises ₹1,400 Crore
Kaynes Technology’s QIP issue aims to raise a substantial sum of ₹1,400 crore. The floor price for the QIP is set at ₹2,449.96 per share, representing a 6% discount to the closing price of Kaynes shares. The company also has the option to offer a discount of up to 5% on the floor price. The QIP floor price is expected to be further discounted to ₹2,424 per share, reflecting a 1.1% discount.
To determine the issue price for the QIP, a meeting of the company’s fundraising committee is scheduled for December 21. The promoters of Kaynes Technology will have a lock-up period of 90 days following the QIP issue. Axis Capital, DAM Capital Advisors, IIFL Securities, and Nomura Financial Advisory have been appointed as the Book Running Lead Managers for the QIP.
Acquisition of Digicom Electronics
In addition to the QIP, Kaynes Technology has announced the acquisition of Digicom Electronics, a prominent electronic manufacturing services company based in the United States. The acquisition will be completed for a cash consideration of $2.5 million, with Kaynes acquiring a 100% stake in Digicom. The primary objective of this acquisition is to bolster Kaynes’ expansion in the US market.
The transaction is expected to be finalized on or before the conclusion of the March quarter of the financial year 2024. Digicom Electronics reported a turnover of $7.78 million for the calendar year of 2022, demonstrating steady growth compared to previous years.
Kaynes Technology’s Stock Performance
Kaynes Technology has experienced significant growth in its stock performance. Since its listing in November 2022 at a 32.5% premium to its issue price of 587, the stock has witnessed a remarkable upward trend. As of now, the stock has gained 251% in 2023, with a current trading price of ₹2,603.25.
Benefits of the QIP
The launch of the QIP presents several benefits for Kaynes Technology. Firstly, it provides the company with an opportunity to raise substantial capital, with a target of ₹1,400 crore. This infusion of funds will enable Kaynes to fuel its growth strategies and undertake various expansion initiatives. Moreover, the QIP allows the company to raise capital by issuing securities to qualified institutional buyers without the need for a public offering.
Expansion in the US Market
The acquisition of Digicom Electronics aligns with Kaynes Technology’s strategic objective of expanding its presence in the US market. By acquiring a well-established electronic manufacturing services company, Kaynes can leverage Digicom’s expertise, resources, and customer base to accelerate its growth in the American market. This move will enable Kaynes to tap into new opportunities and strengthen its position in the global electronics industry.
Positive Market Response
The market has responded positively to Kaynes Technology’s recent developments. Following the announcement of the QIP and the acquisition, the company’s stock price surged by over 5% in early trade. This indicates investor confidence in Kaynes’ strategic decisions and growth prospects.
Conclusion
Kaynes Technology’s launch of the Qualified Institutional Placement (QIP) and its acquisition of Digicom Electronics represent significant milestones for the company. The QIP will provide a substantial influx of capital, enabling Kaynes to pursue its growth strategies and expansion plans. The acquisition of Digicom Electronics will facilitate Kaynes’ expansion in the US market, leveraging the expertise and resources of a well-established electronic manufacturing services company. With these initiatives, Kaynes Technology is poised for further success and growth in the global electronics industry.
Disclaimer: The views and investment tips expressed in this article are solely those of the author and not of any organization or management. It is advisable to consult with certified experts before making any investment decisions.
Users Today : 5
Users Yesterday : 8