New Delhi, Dec. 12 -- A wave of warnings over Kaynes Technology's finances has rattled India's electronics manufacturing sector (EMS), sharpening focus on the industry's ability to fund the heavy investments required to tap upcoming government incentives.

Brokerage firm Kotak Securities' notes on the company this month has had a cascade effect on the wider sector. Since 1 December, shares of Dixon, Syrma and Kaynes have crashed 11-30%, as analysts noted issues with cash flow, availability of working capital, and ability to expand manufacturing to seek government incentives.

On 3 December, a Kotak Securities note reported "ambiguous accounting" of revenue accounted for from one of Kaynes' acquisitions, as well as "inconsistencies" in rel...