Kaynes Technology Receives Credit Rating Reaffirmation from CARE Ratings
CARE Ratings has reaffirmed Kaynes Technology India Limited's credit rating at CARE A-: Stable/CARE A2 for bank facilities totaling ₹625.20 crores. The company's strong market position in the electronics system design and manufacturing sector, significant order book growth to ₹8,099.00 crores, and entry into semiconductor manufacturing through the Semicon programme are highlighted. Kaynes is establishing an OSAT unit in Gujarat and a PCB facility, with a five-year capex plan of ₹4,700.00 crores. The company's financial strength is bolstered by a successful QIP raising ₹1,600.00 crores. CARE maintains a stable outlook, noting challenges such as working capital intensity and foreign exchange exposure.
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Kaynes Technology India Limited has received a credit rating reaffirmation from CARE Ratings Limited, with the agency maintaining its CARE A-: Stable/CARE A2 rating for the company's bank facilities. The rating announcement covers total facilities worth ₹625.20 crores and reflects the company's strong market position in the electronics system design and manufacturing sector.
Credit Rating Details
CARE Ratings has reaffirmed its ratings across multiple facility categories for Kaynes Technology India Limited:
| Facility Type | Amount (₹ crores) | Rating |
|---|---|---|
| Long-term/Short-term bank facilities | 603.20 | CARE A-: Stable/CARE A2 |
| Short-term bank facilities | 22.00 | CARE A2+ |
| Long-term bank facilities | Enhanced from 398.00 | CARE A-: Stable |
The rating agency has also withdrawn the rating for the company's term loan facility as Kaynes Technology has repaid the debt and submitted the no-dues certificate.
Strong Market Position and Order Book Growth
The reaffirmation reflects Kaynes Technology's established presence in the ESDM industry, serving over 500 customers across 30 countries. The company has demonstrated exceptional growth with its order book surging significantly from ₹5,422.00 crores to ₹8,099.00 crores. In H1FY26, the company generated revenue of ₹1,579.00 crores with a PBDIT margin of 16.52%.
The company's revenue streams remain well-diversified across key sectors including automotive, aerospace and defence, electronics, railways, and medical segments. CARE Ratings particularly notes strong demand in IoT, electric vehicle, and aerospace segments, supporting sustained customer confidence and market leadership.
Semiconductor Manufacturing Initiative
Kaynes Technology is among the select domestic players approved under the Government of India's Semicon programme, marking its strategic entry into niche technology segments. The company is establishing an outsourced semiconductor assembly and testing (OSAT) unit in Sanand, Gujarat, and a bare PCB manufacturing facility.
| Project Parameter | OSAT Facility | PCB Facility |
|---|---|---|
| Funding Utilized | ₹377.00 crores | ₹149.00 crores |
| Expected Operations | Q4FY26 onwards | Shortly |
| Anchor Customers | 3 secured | Under development |
| Government Support | Union and state subsidies | ECMS scheme approval |
In October 2025, Kaynes Semicon Private Limited, a subsidiary, successfully shipped 900 multi-chip module units to a customer for testing, demonstrating progress in the OSAT segment.
Financial Strength and Funding Strategy
The company's substantial capex plan of ₹4,700.00 crores over the next five years will be funded primarily through government subsidies and qualified institutional placement (QIP) proceeds, minimizing debt dependence. The successful second QIP raised ₹1,600.00 crores, with ₹841.00 crores utilized for repaying working capital borrowings in H1FY26.
| Financial Metric | Amount |
|---|---|
| Total Capex Plan (5 years) | ₹4,700.00 crores |
| QIP Proceeds | ₹1,600.00 crores |
| Unutilized QIP Proceeds | ₹1,486.50 crores |
| Working Capital Utilization | 55% |
Key Challenges and Risk Factors
CARE Ratings acknowledges several challenges facing the company, including the working capital-intensive nature of the ESDM industry and execution risks associated with the OSAT and PCB projects. The company imports 50-60% of its raw materials annually, exposing profitability to foreign exchange volatility.
The rating agency also considered clarifications provided by the company regarding certain observations in its FY25 audited annual report, including goodwill and intangible asset accounting, related-party transaction disclosures, and cash flow variances. Following management discussions, CARE believes the company's financial statements align with generally accepted accounting principles.
Outlook and Monitoring Factors
CARE Ratings maintains a stable outlook, expecting Kaynes Technology to sustain performance aided by its prominent ESDM market position and healthy order book. The agency will monitor the timely execution of OSAT and PCB projects, receipt of government subsidies, and the company's ability to improve operating cash flows while managing working capital requirements.
Positive rating factors include achieving steady-state revenue from ongoing capex translating into total debt/PBDIT of less than 1.5x, while negative factors involve project implementation delays resulting in total outside liabilities to tangible net worth exceeding 1x.
Historical Stock Returns for Kaynes Technology India
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.53% | +0.61% | -29.31% | -28.97% | -43.10% | +496.93% |
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