KNDS Rolls Toward a Dual Listing With a €33bn Backlog and a State-Locked Share Structure

The Franco-German tank builder KNDS is about to test investor appetite for a defence IPO that combines a bulging order book with an ownership model designed to keep both Berlin and Paris firmly in control. The company plans a simultaneous listing in Frankfurt and Paris, with the first trading session expected in mid-July.

Up to 20% of existing shares will be sold exclusively to institutional investors. Retail buyers need not apply. The two anchor shareholders — France’s GIAT Industries and Germany’s state-owned KfW — will each hold 40% after the offering. Both are locked in for ten years and have mutual veto rights that prevent either side from dropping below 30%. Analysts have already flagged a governance discount, arguing that minority investors will have little sway.

Germany’s entry is contingent on the Bundestag budget committee granting a special mandate. Opposition parties have complained that scrutiny time was too short. Meanwhile, the selling shareholders — GIAT and the private German holding Wegmann & Co. — are being advised by a heavyweight syndicate: Bank of America, Deutsche Bank, Goldman Sachs and Société Générale are joint coordinators, with UBS as senior bookrunner.

Operationally, the numbers are hard to ignore. KNDS ended 2025 with an order backlog of €33.1bn — more than seven times the year’s revenue of €4.4bn. Earnings before interest and taxes came in at €661m, and free cash flow reached €980m. That backlog has a book-to-bill ratio of 3.1, meaning every euro of 2025 revenue was covered three times over by new orders.

Should investors sell immediately? Or is it worth buying KNDS?

Growth ambitions are bold. Management targets a roughly 30% revenue jump in 2026, with the German land systems arm expected to roughly triple its sales versus 2025. Medium-term revenue targets stand at €11bn?–?€12bn, supported by an EBIT margin of 14%?–?15%. Near-term margins will dip to about 12% next year as large programmes ramp up and some highly profitable contracts roll off. Free cash flow is seen above €250m in 2026, with a cumulative target of €2.5bn?–?€3bn over the medium term. Capital expenditure on property, plant and equipment alone is forecast at €750m for 2026.

Dividends are on the horizon, too. KNDS intends to pay out roughly 40% of net profit starting from the 2026 financial year, with the first distribution due in 2027. A loyalty programme will grant double voting rights to shareholders who hold and register their shares for two consecutive years — though a cap ensures GIAT and KfW remain equal in voting power as long as each holds at least 30%.

The wild card in the IPO timing is a potential US Army contract for up to 500 self-propelled howitzers, expected to be decided in July. KNDS, teamed with Leonardo DRS, is one of four bidders alongside Hanwha, Rheinmetall and Elbit America. Winning the deal would open the world’s largest defence market for the group — and the announcement could fall right inside the subscription period. That has made the US artillery prize far more than a commercial milestone; it could directly influence demand for KNDS shares during the bookbuild.

KNDS at a turning point? This analysis reveals what investors need to know now.

Still, the backdrop is tricky. European defence stocks have retreated sharply from their recent peaks as investors question how quickly government promises will translate into earnings. Rheinmetall has lost about a quarter of its market value this year alone. KNDS is betting that state-backed stability combined with a record order book will give it the edge when the books close in mid-July.

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