Kaynes Tech shares fall 6% as Kotak flags issues

Mumbai: Shares of Kaynes Technology, an electronics component maker, dropped 6% on Thursday after Kotak Institutional Equities flagged inconsistencies in the disclosures made by the standalone business and various subsidiaries on inter-company related transactions in 2024-25.

The brokerage said subsidiary Iskraemeco's disclosures show purchases of ₹180 crore from Kaynes Electronics Manufacturing in FY2025, as well as year-end payables of ₹320 crore to Kaynes Technology and ₹180 crore to Kaynes Electronics Manufacturing, and receivables of ₹190 crore from Kaynes Technology. However, none of these transactions appear in the related-party disclosures of Kaynes Technology or Kaynes Electronics Manufacturing, it said.

Additionally, almost all of Iskraemeco's current receivables were shown as due from its parent company, with ₹45.8 crore outstanding for more than a year.


Kotak said Kaynes Technology's FY25 Annual Report highlights ambiguous accounting treatment of goodwill and reserve adjustments under acquisitions, and a sharp addition in intangibles for technical know-how. It also points to a 22-day increase in the cash conversion cycle (CCC) with high capex resulting in negative free cash flow, along with a focus on capital allocation strategy given elevated capex needs and pending government grants. Further, Kotak flagged complex accounting for cash capex versus asset additions.

A stock market darling in the recent bull run, Kaynes shares soared about 950% from its listing in November 2022 till January 2025 to ₹7,822. Since then, the stock has dropped nearly 39% to ₹4,972 on Thursday.