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What is the story about?
Shares of Kaynes Technology Ltd. fell as much as 12% on Friday, December 5, marking its third straight day of losses. Here are the 10 things you should know about the recent turn of events.
Shares fell 12% on Friday, extending their losses from Thursday's 6% fall. The stock was down over 20% for this week, making it the worst week that the stock has had since its listing.
Close to 88 lakh shares of the company were trading on Friday, nearly 10x its 20-day average of 9 lakh shares.
As many as 1.4 crore shares of Kaynes Tech were trading through the course of the week.
This is the highest weekly trading volume that the stock has had since its listing week back in November 2022, when 2.3 crore shares were traded.
In the 26 trading sessions that have taken place since October 29, shares of Kaynes Technology have declined in 21 of them.
During these 26 trading sessions, the stock has lost over ₹17,000 crore in market capitalisation.
At the start of the year, Kaynes Technology had made a record high of ₹7,824.95.
After Friday's fall, the stock has extended its losses from the peak to 45%.
Kaynes Tech had also done a QIP earlier this year, through which it had raised ₹1,600 crore. The company had issued shares to eligible investors at ₹5,625, and as of Friday's close, the stock is down 22% from those levels.
Despite this 45% fall from the peak, shares of Kaynes Technology have kept its early investors well within the money.
As of Friday's closing, the stock is up over 7x from its IPO price of ₹587.
At the current price, shares of Kaynes Tech are trading at a financial year 2027 price-to-estimated earnings multiple of 42.9 times.
That figure is still higher than its peers like PG Electroplast, and Syrma SGS, both of which trade at 37 times one-year forward earnings, and at par with Amber Enterprises, which also trades at 43 times FY27 PE.
At the end of the September quarter, promoters of Kaynes Tech continued to hold 53.5% stake in the company. India's Mutual Funds had a 20.65% stake, led by Motilal Oswal Midcap Fund (5.84%), Axis MF (3.54%), HSBC Midcap Fund (2.43%), among others.
FPIs have a 10.71% stake, while 2.1 lakh retail shareholders, or those with authorized share capital of up to ₹2 lakh, have a 8.75% stake in the company.
Over the last 12 months, the MF shareholding has increased from 12% to just under 21%, while the number of retail shareholders has grown from 1.8 lakh to 2.1 lakh.
The management of Kaynes Tech first issued a detailed clarification to the Kotak Institutional Equities note, which triggered the fall on Thursday.
In an interaction with CNBC-TV18 earlier on Friday morning, the management said that there are no mistakes in the balance sheet or in the P&L segment.
The management also said that there have been delays in collections, but those will normalise by the end of this year.
Kaynes' management also expects to turn cash flow positive by the end of the current financial year.
JPMorgan wrote in its note on Friday that even as they remain "overweight" on the stock, they would advise investors to not "bottomfish" in the stock as it does not see any major triggers for the stock until it reports its third quarter results. As of Thursday's close, JPMorgan's target implied a potential upside of 52% from current levels.
26 analysts have coverage on Kaynes Tech, of which 14 of them have a "buy" rating on the stock, eight have a "hold" rating and four have a "sell" recommendation.
The consensus estimates of price targets are implying an upside potential of 62% from current levels.
Worst Weekly Fall Since Listing
Shares fell 12% on Friday, extending their losses from Thursday's 6% fall. The stock was down over 20% for this week, making it the worst week that the stock has had since its listing.
Close to 88 lakh shares of the company were trading on Friday, nearly 10x its 20-day average of 9 lakh shares.
Weekly Volumes The Highest Since November 2022
As many as 1.4 crore shares of Kaynes Tech were trading through the course of the week.
This is the highest weekly trading volume that the stock has had since its listing week back in November 2022, when 2.3 crore shares were traded.
Losing Streak & Market Cap Erosion
In the 26 trading sessions that have taken place since October 29, shares of Kaynes Technology have declined in 21 of them.
During these 26 trading sessions, the stock has lost over ₹17,000 crore in market capitalisation.
Fall From 52-Week High
At the start of the year, Kaynes Technology had made a record high of ₹7,824.95.
After Friday's fall, the stock has extended its losses from the peak to 45%.
Kaynes Tech had also done a QIP earlier this year, through which it had raised ₹1,600 crore. The company had issued shares to eligible investors at ₹5,625, and as of Friday's close, the stock is down 22% from those levels.
Returns From IPO Price
Despite this 45% fall from the peak, shares of Kaynes Technology have kept its early investors well within the money.
As of Friday's closing, the stock is up over 7x from its IPO price of ₹587.
What Are The Current Valuations?
At the current price, shares of Kaynes Tech are trading at a financial year 2027 price-to-estimated earnings multiple of 42.9 times.
That figure is still higher than its peers like PG Electroplast, and Syrma SGS, both of which trade at 37 times one-year forward earnings, and at par with Amber Enterprises, which also trades at 43 times FY27 PE.
What Is The Current Shareholding?
At the end of the September quarter, promoters of Kaynes Tech continued to hold 53.5% stake in the company. India's Mutual Funds had a 20.65% stake, led by Motilal Oswal Midcap Fund (5.84%), Axis MF (3.54%), HSBC Midcap Fund (2.43%), among others.
FPIs have a 10.71% stake, while 2.1 lakh retail shareholders, or those with authorized share capital of up to ₹2 lakh, have a 8.75% stake in the company.
Over the last 12 months, the MF shareholding has increased from 12% to just under 21%, while the number of retail shareholders has grown from 1.8 lakh to 2.1 lakh.
What Did The Management Say?
The management of Kaynes Tech first issued a detailed clarification to the Kotak Institutional Equities note, which triggered the fall on Thursday.
In an interaction with CNBC-TV18 earlier on Friday morning, the management said that there are no mistakes in the balance sheet or in the P&L segment.
The management also said that there have been delays in collections, but those will normalise by the end of this year.
Kaynes' management also expects to turn cash flow positive by the end of the current financial year.
What Did JPMorgan Say?
JPMorgan wrote in its note on Friday that even as they remain "overweight" on the stock, they would advise investors to not "bottomfish" in the stock as it does not see any major triggers for the stock until it reports its third quarter results. As of Thursday's close, JPMorgan's target implied a potential upside of 52% from current levels.
What Is The Street Saying?
26 analysts have coverage on Kaynes Tech, of which 14 of them have a "buy" rating on the stock, eight have a "hold" rating and four have a "sell" recommendation.
The consensus estimates of price targets are implying an upside potential of 62% from current levels.
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