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Kaynes Technology Ltd has commenced a qualified institutional placement (QIP) on Monday with the aim of raising Rs 1,400 crore, according to a report by CNBC-TV18. The company also announced its plans to acquire Digicom Electronics Inc for $2.5 million to further its expansion into the United States.
The QIP floor price is set at Rs 2,449.96 per share, constituting a 6 per cent discount to Monday's closing price for Kaynes shares. The company may also offer a discount of up to five per cent on the floor price at its discretion.
A QIP allows Indian-listed companies to raise capital from domestic markets without submitting any pre-issue filings with market regulators.
A fund-raising committee meeting on December 21 will determine the issue price for the QIP, with reports indicating a likely price of Rs 2,424 per share, representing a 1.1 per cent discount to the floor price. Notably, the company's promoters will observe a 90-day lock-up period after the QIP issue.
Axis Capital, DAM Capital Advisors, IIFL Securities, and Nomura Financial Advisory are appointed as the book-running lead managers for the QIP.
In tandem with the fund-raising initiative, Kaynes Technology announced its acquisition of Digicom Electronics, a US-based electronic manufacturing services company, in a regulatory filing on the exchanges on Monday. The acquisition, valued at $2.5 million, entails Kaynes acquiring a 100 per cent stake in Digicom. This move will strategically increase Kaynes Tech's presence in the US market. The transaction is anticipated to conclude 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 ending December 2022, surpassing its 2021 and 2020 turnovers of $6.15 million and $6.59 million, respectively.
Having listed in November 2022 at a 32.5 per cent premium to its issue price of 587, the stock has experienced a remarkable surge, gaining 251 per cent in the year 2023 so far. Following the announcements, the company's stocks on December 18 closed 0.9 per cent higher at 2,601.65 on the NSE.
