The company explained that the treatment of goodwill and adjustments to reserves resulted from applicable accounting standards for business combinations. It noted that previously unrecognized intangible assets may be recognized on the acquisition, and that customer contracts related to the Iskraemeco acquisition were treated as intangible assets and amortized accordingly.
Kaynes added that these were evaluated annually and compensated with goodwill in accordance with accounting requirements.
On the reported increase in contingent liabilities to ₹520 crore, the company said most of the increase came from performance bank guarantees issued for Iskraemeco Projects and corporate guarantees extended to subsidiaries. These, the company explained, were necessary to meet financing needs post-acquisition.
Kotak had also highlighted that purchases worth ₹180 crore at Kaynes Electronics Manufacturing were not reflected in related party disclosures. Kaynes acknowledged that while these transactions had been eliminated at the consolidated level under Indian accounting standards, they had been inadvertently omitted from the standalone financial statements. The company said the oversight has been resolved and flagged for future compliance.
A similar explanation was given for year-end liabilities to Kaynes Technology and Kaynes Electronics Manufacturing, as well as receivables that also did not appear in the related party disclosures. Kaynes reiterated that the problem lay only in the standalone documents as the transactions were properly recorded in the consolidated accounts.
The brokerage had pointed out that average borrowing costs for FY25 appeared unusually high at 17.7 per cent. Kaynes responded that the calculation should take into account bill discounting, which can effectively reduce interest costs by as much as 10 percent. The company noted that the average interest rate for FY24, calculated on a comparable basis, would have been 25.3 percent higher than for FY25.
On the issue of ₹180 crore capitalized as technical know-how and prototypes, Kaynes said these assets were largely related to customer contract-related intangibles arising from the Iskraemeco acquisition, in addition to internally developed R&D assets.
It stated that the recognition was in accordance with accounting standards for intangible assets.
Despite the clarifications, selling pressure on the stock remained today as investors weighed the statements against analyst concerns.
Shares of Kaynes Tech were trading nearly 7 per cent lower at ₹4,650 on the NSE at 9.46 am, hitting a low of ₹4,556.50. It opened at ₹4,865.00 against its previous close of ₹4,978.
Published on December 5, 2025
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