Jyoti CNC Automation IPO: Check GMP, Lot Size, Analysis, Listing Date And Other Details; Should You Subscribe?

The initial public offering (IPO) of Jyoti CNC Automation will open for subscription on Tuesday (January 9). The three-day Rs 1,000-crore Jyoti CNC Automation IPO will close on January 11. This means the last day to place bids for the public issue will be Thursday.

The price band for the issue has been fixed at Rs 315-331 per share and the company is looking to raise Rs 1,000 crore through the IPO. The anchor book will open one day ahead of the IPO launch on January 8. Prior to the launch of the IPO, Jyoti CNC Automation is commanding robust GMP in the market. Jyoti CNC Automation IPO GMP on January 5 was Rs 85.

The offer comprises a fresh issue of 3 crore shares. The company will utilize the proceeds to finance long-term working capital needs and repayment of some borrowings.

Jyoti CNC Automation is a metal-cutting computer numerical control (CNC) machine manufacturer.

Important dates:

The IPO of Jyoti CNC Automation will open for subscription on January 9 and close on January 11.

The share allotment for the Jyoti CNC Automation IPO will be finalised on January 12 and shares of Jyoti CNC Automation are expected to be listed on January 16.

Jyoti CNC Automation IPO GMP:

According to websites, tracking daily GMP, the Jyoti CNC Automation IPO GMP on January 5 was Rs 85. At the upper end of the price band of the IPO of Jyoti CNC Automation Ltd at Rs 331, Jyoti CNC Automation shares are likely to be listed at around Rs 416 per share.

On January 4, Jyoti CNC Automation IPO had a Grey market premium (GMP) of Rs Rs 135. With Rs 135 as the GMP, the likely listing price of the offer is being signaled at around Rs 466 per share. The GMP of Rs 135 on the upper end of the book-built IPO price of Rs 331 indicates a listing premium of a healthy 40.79% for Jyoti CNC Automation Ltd over the IPO issue price.

Jyoti CNC Automation IPO

The company has reserved 75% of the IPO size for qualified institutional buyers (QIBs), 15% for high-net-worth individuals (HNIs), and the remaining 10% for retail investors.

Jyoti CNC Automation IPO Lot Size:

Investors are allowed to place bids for a minimum of 45 equity shares and multiples of 45 thereafter. Hence the minimum investment by retail investors would be Rs 14,175 (45 (Lot size) x 315 (lower price band)).

The minimum lot size of 45 shares with an upper price band has an indicative value of Rs 14,895.

Financials of the company:

As of September 30, 2023, the total sanctioned and outstanding indebtedness of the company stood at Rs 1,280.5 crore and Rs 976.8 crore, respectively. Net profit for the six months ended September FY24 stood at Rs 3.35 crore. As of September 2023, the company had an order book of Rs 3,315.33 crore.

In FY23, the company reported a net profit of Rs 15.06 crore with a revenue of Rs 952.60 crore. The firm's EBITDA was up 34% on-year to Rs 97.4 crore with a margin expansion of 74 basis points at 10.47% for FY23. The company's debt-to-equity ratio stood at 10.17x in FY23.

About the company:

Jyoti CNC Automation manufactures and supplies CNC machines. The company has high-profile clients including ISRO, BrahMos Aerospace, Turkish Aerospace, Uniparts India, Tata Advances System, Tata Sikorsky Aerospace, Bharat Forge, Shakti Pumps, Shreeram Aerospace & Defense, Rolex Rings, Harsha Engineers, Bosch Limited, HAWE Hydraulics, Festo India, Elgi Rubber, National Fittings and others.

Jyoti has technology centers at Rajkot - and has sales and service branches in all the major cities of India.

In November 2007, Jyoti acquired Huron Graffenstaden SAS, a pioneer for its 5-axis machining technology.

Internal Risk Factors

The company has incurred losses and consequently, had a negative return on equity in the past, Losses in the future could hurt the firm's growth prospectus and would also preclude it from undertaking actions such as declaring dividends.

The company incurred significant indebtedness and carries substantial debt-servicing obligations. Further, the company has a high debt-equity ratio and a low debt-service coverage ratio. If it does not generate a sufficient amount of cash flows from operations, its liquidity and ability to service its indebtedness could be adversely affected.

The company does not have long-term agreements with suppliers for our input materials and a significant increase in the cost of, or a shortfall in the availability, or deterioration in the quality, of such input materials could hurt the business and results of operations.

The business is dependent on the performance of the Application Industries with a large portion of revenue being derived from a select few of Application Industries. Any downturn in the Application Industries can adversely impact Jyoti's business, results of operations, cash flow, and financial condition of the Company.