KNDS Awards €11m Cable Harness Deal as Defence Valuation Slide Keeps IPO on Ice
Published on 07/09/2026 at 05:05 | Redaktion boerse-global.de
The European armoured-vehicle giant KNDS has placed an €11 million order with the German subsidiary of Finnish electronics specialist Incap, covering cable harnesses and mechanical assemblies for the electronic architecture of its Leopard battle tanks. Production will take place at Incap’s facility in Karlsfeld, Bavaria, which recently secured ISO/IEC 27001:2022 certification — a move designed to underpin the plant’s expansion into defence-grade manufacturing.
The contract is part of a broader push to stabilise and accelerate the Leopard supply chain, particularly for the 2A8 series and subsequent modernisation programmes. KNDS is deepening ties with specialised medium-sized suppliers to ensure steady output of the Leopard tank and the Caesar howitzer. The operational momentum is backed by strong numbers: the group booked revenue of €4.4 billion in 2025, up 16 percent year-on-year, and is targeting annual sales of €11 billion to €12 billion in the medium term. Its order backlog stood at a record €33.1 billion at the start of the year, while free cash flow of €980 million for 2025 gives it ample room to fund capacity expansion and next-generation combat-systems research without tapping public markets.
That self-sufficiency is timely because KNDS has shelved its initial public offering indefinitely, citing high volatility across the European defence sector. The valuation environment has deteriorated sharply. Where the IPO was originally planned on the basis of an €18 billion-plus valuation — the figure the German government used to size its planned €7.2 billion stake — the group is now valued at roughly €12 billion, a level that falls below the floor set by the German owning family. The slide mirrors a broader rout: shares of Rheinmetall and Czech defence group CSG have tumbled, and the cancellation of the large F126 frigate project has added to the gloom. CSG, which made a strong debut in January, has since lost more than half its market value.
Should investors sell immediately? Or is it worth buying KNDS?
Berlin insists it still intends to take a direct stake in KNDS, but only after an IPO takes place. The next realistic window is mid-September, after the summer parliamentary recess. Under the framework agreed in June between the government and the German family, and approved by the Bundestag budget committee on June 26, Germany and France would each hold 40 percent of the post-IPO equity to preserve parity of influence. Yet market sentiment has turned against the plan, with investors increasingly viewing state involvement as a drag on the stock’s attractiveness, even as the underlying order book remains exceptionally strong.
Analysts have criticised Berlin’s hesitation, arguing it allowed a favourable listing window to close. The IPO preparation itself is near completion — a dual listing in Frankfurt and Paris is ready to go — and investment bankers anticipate a stabilisation of sector valuations toward the end of the third quarter, driven by a fresh wave of spending as European states work through long-term procurement contracts. Whether KNDS can bridge the valuation gap by then depends on two things: a recovery in defence-sector sentiment across Europe, and clarity on the eventual scale of the government’s stake, which for now remains a liability in the eyes of private investors.
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