The initial public offering (IPO) of Jyoti CNC Automation will open for subscription on Tuesday, January 9. The IPO of the Gujarat-based compamy comprises fresh issuance of equity shares worth up to Rs 1,000 crore. The initial share-sale offer will be the first public issue of 2024 on BSE and NSE.
The IPO allotment will likely take place on January 12, while its share listing will take place on January 16 on both BSE and NSE.
The minimum lot size for an application is 45 shares. The minimum amount of investment required by retail investors is Rs 14,895.
Day 1: Jyoti CNC Automation Limited IPO – Fully Subscribed
Subscription Data (as of 12:42 PM, January 09, 2024)
QIB – 0.00x
NII – 1.17x – {(NII 10L+) – 0.72x, (NII 2L-10L) – 1.95x},
Retail – 4.60x
Employee – 2.01x
Total – 1.15x
Jyoti CNC Automation IPO GMP Today
According to market observers, unlisted shares of Jyoti CNC Automation Limited continue to trade Rs 77 higher in the grey market as compared with its issue price. The Rs 77 grey market premium or GMP means the grey market is expecting a 23.26 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Jyoti CNC Automation IPO Details
Jyoti CNC Automation IPO is a Rs 1,000-crore offer, comprising entirely a fresh issue of 3.02 crore shares.
Equirus Capital Private Limited, ICICI Securities Limited and SBI Capital Markets Limited are the book running lead managers of the Jyoti CNC Automation IPO, while Link Intime India Private Ltd is the registrar for the issue.
Jyoti CNC Automation Limited, which was incorporated in January 1991, is a manufacturer and supplier of CNC machines. The company is based in India and specializes in manufacturing and supplying CNC machines.
The product range includes CNC turning centres, CNC turning-milling centres, CNC vertical machining centres (VMCs), CNC horizontal machining centres (HMCs), simultaneous 3-axis CNC machining centres, simultaneous 5-axis CNC machining centres and multi-tasking machines.
Jyoti CNC Automation Limited reported a net profit of Rs 15.06 crore with a revenue of Rs 952.60 crore in FY23 against a loss of Rs 29.68 crore in FY22. EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 34 per cent on-year to Rs 97.4 crore with a margin expansion of 74 bps at 10.47 per cent for FY23.
Some of the major risks are:
1) The company’s dependence on the top 10 customers increased from 20.08 percent in FY23 to 39.92 percent during the 6 months ended September 30, 2023.
2) Its debt-to-equity ratio stood at 10.17x in FY23.
3) As of September 30, 2023, Jyoti CNC had one of the lowest RoE and RoCE in its peer group which includes Elgi Equipments, Lakshmi Machine Works, Triveni Turbine, TD Power Systems and Macpower CNC Machines.
4) The price-to-earnings (P/E) ratio based on diluted EPS (Rs 1.02) for FY23 at the upper end of the price band comes at 324.51 times and at the lower end, it stands at 308.82 times.
Should You Buy?
At the upper price band, the company is valued at a P/E of 374.22x, EV/EBITDA of 85.59x with a market cap of Rs 7,527.4 crore post-issue of equity shares.
“Since the company will use the majority of its IPO proceeds to repay its debt which is going to reduce interest costs and hence it will have a positive impact on profitability going forward. . Apart from that there is revenue visibility for the company due to its order book size and nd majority of the revenue is from the aerospace and defence industries which are high-growth sectors. We believe that the issue is fairly priced and recommend a ‘subscribe-long term’ rating,” said Manan Goyal of Anand Rathi.
“With an improved market share, growing industry demand, diversified presence, augmenting capacities at regular intervals and improving financial risk profile by repaying certain debt, a strong order book of Rs 3,310 crore to be executed over the next few years augurs well for the company. Hence we suggest a ‘subscribe’ rating for the long term,” said analysts at Reliance Securities.
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