Three years ago, in November 2022 to be precise, a Mysuru-based electronics manufacturing company with annual revenue of about Rs 700 crore and profits of roughly Rs 42 crore went public. The IPO pricing, at Rs 587 a share, valued the company—Kaynes Technology India Ltd—just over Rs 3,400 crore.
The issue was covered 34 times and when the stock listed, it soared 32%. And it kept climbing and climbing. By August 2023, the stock had more than tripled from its IPO price, crossing Rs 2,000 apiece.
The stock doubled again over the following ten months, crossing Rs 4,000 in June 2024. By January 2025, it came close to topping Rs 8,000 before a broader stock market correction pulled it down by almost half in just a few weeks. It resumed its upward march quickly, coming close to Rs 8,000 level again in October and notching a market cap of Rs 51,650 crore. Brokerages then expected the stock to move toward Rs 9,000 levels.
But it all came crashing down this month. Here’s what happened.
Late last week, Kotak Institutional Equities dropped a bombshell on Kaynes Technology. In a research note analyzing Kaynes’s annual report, Kotak flagged several aggressive or confusing accounting moves related to a big acquisition and internal transactions that made profits look better than they “really” were.
Kaynes last year bought Iskraemeco, a smart-metering business. Kotak’s report pointed out something odd: in the second half of FY25, Iskraemeco suddenly showed a huge profit margin (about 28%) versus a loss earlier. Kaynes later clarified that a new owner sometimes “washes out” all old losses at once, so future quarters look strong.
Another one pertains to goodwill—an extra amount for brand name, customer contracts, and future profit potential – on the balance sheet. Kotak noted that Kaynes paid about Rs 88 crore to buy Iskraemeco and another company, Sensonic, and internally calculated about Rs 114 crore in goodwill. However, Kaynes’s consolidated balance sheet did not show any big increase in goodwill. Kotak called this treatment “ambiguous”.
One more big flag was related-party transactions within the Kaynes group. Kotak found multiple mismatches in those disclosures. Essentially, money was moving among the parent and the subsidiaries, but their accounts didn’t match up.
Finally, Kotak flagged an R&D/know-how expense of about Rs 180 crore in Kaynes’s books. The FY25 report showed Kaynes capitalised this money, which means it treated the amount as a long-term asset rather than an immediate expense. Kotak noted that Kaynes didn’t list any breakdown of these know-how assets, making the move feel ambiguous.
To be sure, these allegations don’t prove fraud. But they do indicate gaps in disclosure or, worse, creative accounting.
On its part, Kaynes denied most allegations though it did admit the related-party transactions were “inadvertently not disclosed” in the standalone statements and were eliminated in the consolidated statements as per accounting norms.
Kotak’s report hammered its stock. Its shares plunged to a one-and-a-half-year low of Rs 3,713.75 this week, or half its October high, before recovering a little. The company currently commands a market cap of about Rs 28,000 crore.
Of course, not everyone agrees with Kotak entirely though other brokerages, too, turned a bit cautious. ICICI Direct, for instance, says the issues Kotak highlighted don’t indicate any fraudulent intent and won’t have any financial impact on the company. But it did reduce its price target on Kaynes to Rs 6,400 from Rs 8,900 in October.
Nomura reduced its target price to Rs 5,454 from Rs 8,478. JPMorgan advised against “bottom fishing” in the stock and Macquarie noted that while Kaynes’s clarification sounded reasonable, the “water has been muddied”.
All in all, the past few days have been turbulent for Kaynes. What should investors do? Well, they should go through all the research reports and do their due diligence before doing anything else!
On the Cloud
While Kaynes Tech is under a cloud, global tech giants operating in India are betting big on a cloud of a different type.
Amazon, the world’s biggest ecommerce company, said this week it plans to invest more than $35 billion in India by 2030. Microsoft, whose Windows operating system boots up a vast majority of computers worldwide, promised an investment of $17.5 billion in the country by that year. This marks Microsoft’s largest investment commitment in Asia.
Where will all these billions of dollars go? Well, where else, into the cloud! Both companies want to expand their cloud computing businesses—Amazon has AWS and Microsoft owns Azure—and set up massive data centres. In fact, the two announcements come shortly after Google committed $15 billion over the next five years to build AI data centers.
Amazon said it wants to boost artificial intelligence capabilities and increase exports. The investment will also focus on enhancing logistics infrastructure, supporting small businesses and creating 1 million additional job opportunities, it said.
Amazon, which competes with US peer Walmart-owned Flipkart and Mukesh Ambani’s Reliance Retail, says it has invested $40 billion in India since 2010 to build fulfilment centers, transportation networks, data centers, and digital payments infrastructure. The company says it has helped generate more than $20 billion in total exports for Indian sellers on its platform in the last 10 years, and plans to lift that to $80 billion by 2030.
Microsoft is setting up a new data center in Hyderabad that would be its largest hyperscale region in India and would go live in mid-2026. CEO Satya Nadella, who was on a visit to India this week attending AI conferences and meeting Prime Minister Narendra Modi, said the investment will give the company the largest cloud-computing presence in India.
But why are the world’s tech goliaths investing heavily in India? It’s obvious, really. India is one of the largest and fastest-growing digital markets. And a strong presence in cloud and AI infrastructure is critical for these companies to maintain their dominance and keep growing at a fast pace.
It Just Got a Little Cloudy
While Amazon, Microsoft and Google are intensifying competition in India, three other American companies were in the news this week for a multi-billion-dollar corporate war back home. And this war will impact India, too.
This week, US President Donald Trump and the Multiplex Association of India found themselves on the same side, though for different reasons. Now, we know, Trump and the group that represents companies like PVR don’t usually show up in the same headline. But here’s the common link: they both don’t seem to like Netflix’s proposed acquisition of Warner Bros Discovery.
Netflix has offered a hefty $72 billion to buy the iconic Hollywood studio.
The Multiplex Association claims they are already fighting an uphill battle against the rise of streaming platforms. Now, with Warner Bros potentially being absorbed by a player like Netflix, which has historically shown little love for the big screen, the theatre business could take another hit.
Why the worry? For starters, Hollywood films contribute roughly 15% of Indian theatre revenues, particularly during slow spells when big-ticket Bollywood releases are scarce. Warner Bros, with franchises like Fantastic Beasts, The Batman, and Dune, has long been a reliable supplier of crowd-pullers.
Netflix, on the other hand, hasn’t exactly been known for prioritszing theatrical runs. Its model is built on the binge-from-home experience.
In a statement, the association warned that this acquisition “poses a direct economic threat to India’s broader film economy.” They argue that more producers may skip theatres altogether and go straight to streaming. This trend is already playing out in India, where smaller films increasingly opt for a safer, upfront cheque from OTT platforms over the uncertain economics of a theatrical release.
The fear is not just about fewer films on the big screen, but also about shorter runs for those that do make it. A Netflix-owned Warner Bros may mean tighter release windows, less marketing push, and a quicker move to streaming, shrinking theatre revenues even further.
In the US, Trump’s concern with the deal isn’t about the fate of the cinematic experience—but about CNN.
Netflix’s $72 billion offer notably excludes CNN and other cable news properties. Trump, never one to miss an opportunity to go after his favourite media punching bag, has made it clear: he wants CNN sold.
“It’s imperative that CNN be sold,” he said. “I think the people that have run CNN for the last long period of time are a disgrace.”
And so, Trump is reportedly throwing his weight behind a competing, hostile bid—this one from Paramount-Skydance. Their offer: a full $108.4 billion, which crucially includes CNN and other cable networks.
Paramount is offering Warner Bros shareholders $30 per share, more than Netflix’s $27.75—but for the whole pie, not just selected slices.
A Walk in the Clouds
Let’s now move on from the corporate world to macroeconomic developments. In his December monetary policy statement—and again in the press conference that followed—Reserve Bank of India Governor Sanjay Malhotra gave little away. Asked about the scope for another rate cut, he remained the picture of central banking discretion: strategically noncommittal. This brand of carefully hedged communication is a well-worn tool in the central banker’s kit—designed not to stir markets, but to lull them into a state of neutral expectations.
While Malhotra kept his cards close to his chest, his counterpart across the Atlantic appeared to deal a slightly more generous hand. The US Federal Reserve cut its benchmark policy range by 25 basis points to 3.5–3.75%, and that move has rekindled some hope that the RBI might follow suit—especially with domestic inflation now at record lows.
So why does the Fed’s decision matter for India?
A big part of the answer lies in what’s known as the interest rate differential—the spread between yields on Indian government bonds and their US Treasury counterparts. This spread is a critical factor in drawing foreign portfolio investors (FPIs) into Indian debt. If the gap narrows too much, US Treasuries—backed by the world’s largest economy—begin to look like the safer and more lucrative option.
To make matters trickier, FPIs also have to shell out part of that spread to hedge against rupee depreciation. So, when the return advantage shrinks, even marginally, India can quickly fall out of favour with global bond buyers. That’s why any easing by the Fed effectively hands the RBI a little more elbow room: it can cut rates without wiping out the yield advantage that attracts foreign capital.
Of course, whether Malhotra will use that room is another story. The path ahead remains uncertain, not least because the US Fed itself isn’t quite sure where it’s headed.
In his own remarks, Fed Chair Jerome Powell reminded markets that the central bank’s decisions would be made “meeting by meeting”—a classic Powellism that says everything and nothing all at once. While he acknowledged the Fed has already delivered 175 basis points of easing since last September, he made no promises about what comes next.
The December rate cut itself was no slam dunk. It came out of a divided Federal Open Market Committee (FOMC), with some members pushing for deeper cuts and others voting to keep rates unchanged. That division is likely to make Powell’s job harder in the months ahead.
And then there’s the looming shadow of politics. Powell, now in the twilight of his term, faces renewed pressure from President Donald Trump—who has not been shy about urging easier monetary policy to cushion the blow from his tariff-heavy trade strategy. With reciprocal tariffs feeding into cost structures and potentially muddying inflation signals, Powell’s balancing act between jobs, growth, and price stability becomes all the more delicate.
Market Wrap
Stock market benchmarks ended lower this week, as gains in the last two sessions driven by rate cuts in India and the US failed to offset losses of the first three days.
Both the NSE Nifty and the BSE Sensex closed 0.5% lower. In the broader market, the mid-caps slipped about 0.3% while the small-caps declined 0.4%.
Market breadth was negative with 29 of the 50 Nifty stocks and 18 of the 30 Sensex stocks losing momentum this week.
IndiGo operator InterGlobe Aviation was the biggest loser for the second week in a row, as it continued to struggle with flight operations and faced increased government scrutiny. It lost 9.5% this week, after crashing 9% last week.
It was followed by Asian Paints, Bharat Electronics, Hindustan Unilever, and JSW Steel. Bajaj Finance, Zudio owner Trent, state-run Power Grid, ICICI Bank, Tata Motors Passenger Vehicles and Max Healthcare were among the other laggards.
IT stocks were mixed, with TCS, HCL Tech and Infosys closing in the red but Wipro and Tech Mahindra managing to stay in the green.
Two Aditya Birla Group companies were the top gainers. Hindalco rose 3.5% while Grasim climbed 3.3%, likely helped by a BlackRock fund’s investment of up to Rs 3,000 crore in Aditya Birla Renewables.
Tata Steel, Zomato parent Eternal, Titan, Maruti Suzuki and Reliance Industries were among the other gainers.
Other Headlines
- Adani Enterprises’ Rs 25,000-crore rights issue oversubscribed
- Pension regulator PFRDA allows private pension funds to invest in gold and silver ETFs
- Biocon to merge unit Biocon Biologics with itself, buy out external investors in $5.5 billion deal
- BlackRock fund to invest up to Rs 3,000 crore in Aditya Birla Renewables
- Nestle India CFO Svetlana Boldina to step down with effect from January 31, 2026
- Ecommerce firm Meesho jumps about 58% on stock market debut, gets a valuation of Rs 78,930 crore
- CBI files new cases against Reliance Home Finance, Reliance Commercial for alleged bank fraud
- Vietnam’s Vingroup signs MoU to invest $3 billion in Telangana
- Tata Electronics signs up Intel as major customer for $14 billion semiconductor foray
- SEBI launches Past Risk and Return Verification Agency (PaRRVA) to curb mis-selling of investment products
That’s all for this week. Until next week, happy investing!
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