KNDS’s advisors are keeping their fingers crossed for another IPO attempt in the September/October window, but market conditions mean a successful listing is no sure thing, according to five sources familiar with the situation.

Having filed its intention to float on 24 June, the Franco-German tank manufacturer pulled its initial listing effort on 1 July, citing “market volatility” in the European defence sector. The pre-marketing launch timing was “unlucky”, two of the sources said.

The German government was to take a 40% stake in KNDS via the IPO. But on 23 June, Berlin unveiled it was scrapping the multibillion-euro F126 frigate programme, in an announcement that was criticised at the time for being clumsy given the KNDS listing effort.

Rheinmetall – lead contractor on the F126 project and KNDS’s key comparable – fell 18.7% on 24 June but has recovered those losses, climbing 20.5% since that low. Rheinmetall is now performing well enough to support the listing effort, one source said.

As a result, KNDS deal advisors have consequently picked up their pens to revise the IPO prospectus, another of the sources said.

“Overall sector sentiment feels a lot better than it did on the first attempt,” a buysider running the rule on the IPO said.

But with KNDS’s listed comparables still at attractive entry valuations, some investors may feel it is less risky to put their money to work with those names, rather than taking a chance with a new stock market entrant, they added.

“Sentiment has improved a bit, but I’m not sure enough has changed,” one source concurred.

“The peak of interest seems to have passed” in European defence names, but the recovery affords cause for optimism and KNDS’s 1H26 financial results slated for 3 September should be reassuring, another source said. Investor conversations will follow, he added.

Based on its closing share price on 25 August, Rheinmetall had a FY25 EV/EBIT of 30.8x. Other comps previously cited by this news service include Renk at 22x, BAE Systems at 20.4x, and Leonardo at 22.4x, with an average of 23.9x. Their estimated 2026 EV/EBIT multiples range between 16.7x and 19.2x, with an average of 18.1x.

KNDS reported FY25 EBIT of EUR 661m from sales of EUR 4.4bn, giving it an EBIT margin of 15%.

For 2026, the company expects revenue growth of 30% and an EBIT margin of 12%. This would imply revenues of EUR 5.7bn and EBIT of around EUR 690m. The defence firm had a net cash position of around EUR 2bn as on 31 December 2025.

On the basis of FY25 figures, KNDS’s equity could land within a range of EUR 15.5bn-EUR 22.4bn, before any IPO discount. In June, this news service calculated an equity value range between EUR 13.5bn-EUR 19.5bn, based on the same basket of comparables.

Using the 2026 EV/EBIT estimate for the company and peers, the equity value range would be EUR 13.5bn-EUR 15.25bn, before any IPO discount.

While the original IPO effort was buffeted by KNDS’s comps share prices falling, two investors suggested an equity valuation of EUR 10bn-EUR 13bn. Reports at the time suggested the Wegmann family – controlling 50% of KNDS – were unwilling to list at a valuation below EUR 12.5bn.

The Wegmann family’s intentions are key, one of the sources noted.

There are not multiple windows for launch this year; a listing before November’s US midterm elections is seen as the most viable strategy, another of the sources said.

Beyond market conditions, there are few questions about the equity story, three of the sources said.

The lack of integration between KNDS’s French and German operations is well understood and an internally commissioned probe into a 2013 contract with the Qatari Armed Forces is considered a legacy issue, one of the sources argued.

Following fallout from the F126 frigate debacle, political support for KNDS has solidified, one of the sources noted, pointing to the Franco-German Defence and Security Council on 17 July.

German Chancellor Friedrich Merz announced that both countries had agreed to “deepen their strategic cooperation”, specifically citing KNDS in that context.

A communique from the Franco-German Defence and Security Council went further: “As future co-shareholders [France and Germany] will continue to jointly promote adequate harmonisation of operations and constant innovation, ensuring that KNDS remains able to develop customer-oriented programmes, deliver effective solutions to the needs of both armed forces and export those solutions to partner countries.”

A spokesperson for the German government said it “remains interested in an early stock market listing and a federal stake in KNDS”, pointing to the Franco-German Defence and Security Council communique.

KNDS and the French State Participation agency (APE) declined to comment. IPO syndicate banks Deutsche Bank, BofA Securities and Societe Generale also declined to comment; Goldman Sachs did not immediately reply to a request for comment. The Wegmann Group did not reply to requests for comment.