Kaynes Tech shares jump over 5%; key triggers behind Street’s big thumbs up to the electronics maker

Kaynes Technology India shares zoomed on Tuesday, on track to finish higher for the seventh session in a row, after the end-to-end and Internet of Things (IoT) solutions-enabled integrated electronics manufacturer announced the acquisition of electronics manufacturing services provider Digicom Electronics for a cash consideration of $2.5 (Rs20.8 crore at $1=Rs 83) million to expand its footprint in the US.  

The surge brought the stock within Rs 215 of a peak registered in October, as Kaynes Tech shares jumped more than five per cent to Rs 2,740 apiece on BSE. At 10:30 am, Kaynes shares held on firmly to their intraday gains, trading 4.8 per cent higher for the day at Rs 2,729.5 apiece.  

Analysts attributed the recent upmove in the stock to a combination of triggers: 

1. Acquisition of Digicom Electronics Inc 

Kaynes Tech plans to complete the acquisition of Digicom Electronics by the end of the March quarter.  

Digicom Electronics’ turnover stood at 7.78 million in 2022, Kaynes said.

Founded in 1982, Digicom Electronics Inc is an electronic manufacturing services company headquartered in the USA. The company has a presence primarily in the USA.  

2. QIP offer  

Kaynes Technologies launched a qualified institutional placement (QIP) issue on Monday, December 18, at a floor price of Rs 2449.96 per share.  

"Board has fixed the ‘Relevant Date’ for the purpose of the Issue,....as Monday, December 18, 2023, the date of the meeting in which the Board decides to open the Issue, and accordingly the floor price.....is Rs 2,449.96 per equity share," Kaynes said in a regulatory filing. 

According to Zee Business research, the electronic manufacturer is likely to raise approximately Rs 1,400 crore through the QIP.  

The actual fundraising amount will be discussed in a meeting on December 21.  

A QIP is a process through which a listed company can raise capital by issuing securities to qualified institutional buyers without the need for a public offering. 

ALSO READ: All you need to know about QIPs

Kaynes Technology shares: Past performance 

Kaynes Technology shares are on track to close the year with a multi-bagger return of more than 267 per cent, sharply outperforming a rise of 17 per cent in the headline Nifty50 index. 

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