KNDS Hurtles Toward Dual IPO With Record Backlog and UK Howitzer Win as Audit and Ownership Hurdles Test Market Appetite

Franco-German defence giant KNDS pursues dual listing with €33.1B order book, but stalled audit and 80% state ownership threaten investor appeal; only 20% free float at debut.

The Franco-German defence group KNDS is powering toward a Frankfurt and Paris dual listing with an order book swollen to €33.1 billion and a freshly secured British howitzer contract, but the road to market is anything but smooth. A stalled audit and a state-dominated ownership structure that will leave only a fifth of shares in public hands threaten to temper investor enthusiasm for one of Europe’s most anticipated defence floats.

Revenues climbed 16% to €4.4 billion in the 2025 fiscal year, while the order backlog surged from €23.5 billion at the end of 2024 to €33.1 billion, fuelled by European governments replenishing heavy weapons stockpiles amid heightened defence spending. The group has also locked in a major UK order for 72 self-propelled howitzers, worth close to £1 billion, adding further weight to the pipeline. KNDS benefits from selling integrated platform-and-munition packages, a strategy that plays well in a market demanding standardisation and reliable delivery.

Yet for all the operational momentum, the listing’s architecture is proving contentious. Germany has committed to taking a 40% stake through state-owned KfW, mirroring France’s existing holding, leaving just 20% of the equity free-floating at debut. That constrained free float is expected to hamper index inclusion and depress daily trading volumes, making it difficult for institutional investors to build meaningful positions. Both governments plan to reduce their holdings to 30% each within three years, which would gradually lift the float to a more palatable 40%. A special agreement will grant both states equal voting rights on strategic decisions and production sites even after the reductions.

Tom Enders, KNDS’s supervisory board chairman, has been blunt about the arrangement. He described the initial 80% state stranglehold as temporary, arguing that defence companies do not need permanent state majorities and warning that heavy government control could block the long-overdue consolidation of Europe’s tank industry.

The more immediate bottleneck is the audit sign-off. PwC has refused to certify KNDS’s 2025 annual accounts pending the completion of an internal investigation by law firm Freshfields into a 2013 tank deal with Qatar valued at €1.89 billion. No indications of wrongdoing have emerged so far, but without the final report there can be no auditor’s opinion — and without that opinion, no listing prospectus. If the approval is granted by the end of May, the IPO can proceed in the June or July window. Any slippage pushes the date back to September 2026.

In the meantime, KNDS has been cleaning up its balance sheet. On 19 May 2026, it sold 5.8 million shares in drive-system specialist Renk for €45.10 apiece, raising around €262 million. The group retains a 10% stake in Renk, subject to a six-month lock-up. JPMorgan and Lazard are leading the IPO process, which is primarily intended to provide an exit for the German Wegmann family, whose Krauss-Maffei Wegmann merged with France’s Nexter in 2015 to form KNDS.

With audited 2025 numbers now a precondition for the valuation, all eyes are on the PwC deadline. The political tailwind from higher defence budgets is unmistakable, but the market price at the Frankfurt and Paris debut will ultimately be judged on margins, cash flow, and the quality of that €33.1 billion order book. For would-be investors, the question is not just whether the float happens this summer — but whether the cramped free float leaves them any room to get on board.