Kaynes Crash: Kotak’s Claims vs Kaynes’ Clarifications

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A sharp stock fall, anxious investors, and viral social-media claims triggered panic. But Kaynes’ detailed rebuttal paints a far more nuanced picture—no fraud, no cash leakages, and mostly accounting-clarity issues.

By S JHA

Mumbai, December 6, 2025 — Kaynes Technology faced a sharp stock fall this week after a Kotak Institutional Equities report flagged six red-flag accounting issues—from goodwill and technical know-how costs to rising borrowing expenses and mismatched related-party transactions.

Social media amplified the panic, but Kaynes responded with a detailed point-by-point clarification, insisting the concerns were largely misunderstandings rather than evidence of wrongdoing.

Kotak’s note highlighted ambiguous intangible accounting, a spike in contingent liabilities, mismatches in subsidiary purchases, missing related-party payables, rising borrowing costs, and an unusually large ₹1.8-billion capitalisation of technical know-how.

Kaynes, however, countered each claim. The company said its acquisition-related goodwill adjustments were standard practice, contingent liabilities reflected guarantees—not new risks—and the RPT mismatch with Iskraemeco was a clerical error at the subsidiary level, not a concealment. Large internal payables, it said, were eliminated during consolidation, while higher borrowing costs stemmed from acquisitions, capex, and working-capital expansion.

The capitalised technical know-how, Kaynes added, included mandatory payments, R&D, prototype development, and complied with Indian Accounting Standards.

Analysts say the bigger issue may be disclosure quality, not integrity. While Kaynes appears to have avoided fraud or cash-flow concerns, its complex M&A-driven structure demands cleaner reporting. “Investors hate mismatches—even small ones shake confidence,” one market watcher posted on X.

Meanwhile, brokerage MS expects Kaynes to grow fastest among its coverage companies, forecasting a 46% revenue CAGR between FY25–28 and EBITDA margins rising to 16.7%. New OSAT and PCB businesses are expected to contribute significantly from FY27 onward, with exports emerging as the next frontier backed by a ₹16-billion QIP.

But, as market commentator Tirthankar Das noted, the recent correction may have less to do with valuations and more with Kaynes’ inability to maintain its own aggressive growth guidance. “When the pace of sales growth slows, the signal is clear,” he wrote. “Just run.”

With clarity improving but expectations recalibrating, investors now wait to see where the real bottom lies.

(Disclaimer: This article makes no recommendation for buy or sell of shares of any company)