KNDS Accelerates Polish Ammunition Hub as IPO Falls Victim to Defence Sector Gloom
Published on 07/05/2026 at 13:53 | Redaktion boerse-global.de
Europe's largest tank maker is pressing ahead with production expansion even as its long-awaited stock market debut remains firmly on hold. KNDS has struck a partnership with Polish manufacturer NiewiadĂłw to build a local facility for 155-millimeter artillery shells, targeting an annual output of 180,000 rounds. The ammunition, part of the LU211 series with a range of roughly 40 kilometers, is compatible with howitzers such as the Caesar, Krab and Panzerhaubitze 2000. The move comes alongside a comprehensive technology transfer and follows a fourfold increase in the group's West European production capacity.
The operational push contrasts sharply with the company's capital markets ambitions. KNDS confirmed on Wednesday evening that its planned dual listing in Paris and Frankfurt has been indefinitely shelved. Plans for the initial public offering had already been delayed earlier this spring, and investors were warned that the window in September might mark the earliest possible — but still unlikely — second attempt. Some insiders now say the IPO could be abandoned altogether.
At the heart of the impasse lies a stubborn valuation gap. The owners, the states of France and Germany together with the KMW founding family, insisted on a minimum valuation of €12.5 billion. Institutional investors, however, refused to accept any price above €12 billion, pointing to the recent turbulence in the defence sector. Earlier media reports had floated figures exceeding €15 billion, but those expectations quickly evaporated as market sentiment soured.
Should investors sell immediately? Or is it worth buying KNDS?
The broader industry has indeed taken a battering. Rheinmetall, the bellwether of European defence, saw its shares plunge from a record high above €2,000 in autumn 2025 to around €1,000 on Xetra by late June, after Berlin scrapped a major frigate programme linked to the group. Czechoslovak Group, which listed on Euronext Amsterdam in January at €25 per share, now trades near €14 — a decline of more than 40% from its issue price and close to an all-time low. "The trust deficit is the single biggest barrier to reviving the KNDS IPO," one analyst noted.
While the public listing stalls, the two governments are already reshaping the ownership structure for a future attempt. France will reduce its current stake to 40%, and Germany will acquire an identical package — purchasing shares from the KMW founding family at a price of up to €7.2 billion, subject to approval by the Bundestag budget committee. The equal stakes grant both states parallel control rights, a key political precondition for restarting the IPO process down the line.
That process remains contingent on a broader recovery in sentiment. The NATO summit in Ankara on July 7–8, 2026, will discuss higher production rates and continued support for Ukraine, while the European Commission earlier this month unveiled €1.5 billion in defence funding initiatives, part of a longer-term plan to channel €190 billion into strategic investments by 2036. Yet investors remain sceptical that such pledges will translate quickly enough into earnings growth to justify the valuations demanded today.
KNDS can point to a record order book of €33.1 billion as of December 31, and revenue climbed nearly 16% in fiscal 2025 to €4.4 billion. That backlog provides years of earnings visibility, but it has not been enough to close the gap between seller expectations and buyer appetite. Until the sector-wide trust deficit narrows, the world's largest tank builder will stay in private hands — even as it races to ramp up ammunition output in Poland and beyond.
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