Nearly 50% crash in Kaynes Technology share price wipes out ₹5000 crore wealth of Mutual funds
The sharp sell-off in Kaynes Technology further extended into Monday’s session, December 8, with the stock crashing another 7.4% to ₹4,030 apiece, the lowest level since April, as investor sentiment towards the counter remained deeply subdued.
The stock last week closed with a steep 21% drop, the biggest weekly crash since its listing in November 2022, after domestic brokerage firm Kotak Institutional Equities flagged inconsistencies in FY2025 disclosures, sparking panic despite management clarifications.
In an interaction with CNBC-TV18 on Friday, Kaynes Tech management issued a detailed clarification in response to the Kotak Institutional Equities note, but it did little to prevent the stock from falling.
In a note, Kotak said it had identified multiple mismatches between the disclosures made by Kaynes Technology, Kaynes Electronics Manufacturing, and its subsidiary Iskraemeco for FY2025.
The brokerage highlighted that these “multiple mismatches between the disclosures” across the entities raised concerns over balance sheet representation and cash flow clarity.
Kotak raised sharp concerns over Kaynes’ acquisition of Iskraemeco and a 54% stake in Sensonic for ₹88.3 crore, noting that while ₹114 crore of goodwill was recognised, the FY25 balance sheet showed no corresponding increase. Instead, it reflected a small negative adjustment and a rise in general reserves.
Management said the purchase price was treated as an intangible asset, but Kotak highlighted that no such additions or fair value adjustments were disclosed, and the ₹72.5 crore payment did not appear in the cash flow statement.
Kotak also flagged inconsistencies in related-party disclosures, citing mismatches in purchases, payables, and receivables between Iskraemeco, Kaynes Technology, and Kaynes Electronics Manufacturing.
Separately, JPMorgan advised investors to stay cautious and avoid “bottom fishing” due to the lack of near-term catalysts. Although it maintained an ‘overweight’ rating with a ₹7,550 target, it said sentiment, weak cash flows, and balance sheet pressure continue to weigh on the stock, with the bottom difficult to call.
Mutual funds face ₹5,000-crore hit as stock plunges nearly 50% from recent highs
The relentless crash in the Electronics Manufacturing Services (EMS) company has also resulted in huge losses for domestic mutual funds. At the end of the September quarter, 34 mutual funds collectively owned a 20.65% stake, almost double the 13.07% they held in the same period last year.
The recent crash in the stock has brought it 47% lower from its October 2025 high of ₹7,705 apiece, resulting in a cumulative loss of around ₹5,084 crore for fund houses, taking the stock’s today’s low price into account.
Some of the key mutual funds holding stakes in the company include Axis Small Cap Fund with a 3.54% stake, Motilal Oswal Midcap Fund, which owns 5.84%, and HSBC Midcap Fund and SBI Invesco India Flexi Cap Fund, each holding 2.43% and 1.13%, respectively, at the end of Q2 FY26.
Apart from the mutual funds, promoters hold the majority 53.5% stake, while general shareholders own a 12.2% stake in the company, according to BSE shareholding.
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