The initial public offering (IPO) of Jyoti CNC Automation opened on January 9, 2024, and is set to close on January 11, 2024. The CNC machines manufacturer has established the IPO price band at ₹315-331 per equity share.
**Details of the IPO:**
– The IPO consists solely of a fresh issue of 3.02 crore shares, totaling ₹1,000 crore. There is no offer-for-sale component.
– The lot size for the Jyoti CNC Automation IPO is 45 equity shares, with multiples of 45 equity shares thereafter. At the upper end of the price band, retail investors will need to invest ₹14,895 for one lot.
**Reservation Breakdown:**
– Qualified institutional buyers (QIBs) have a reserved portion of not less than 75% of the shares, non-institutional investors (NIIs) have up to 15%, and retail investors have up to 10%.
– Eligible employees participating in the employee reservation portion are offered a discount of ₹15 per equity share.
**Grey Market Premium (GMP):**
– As of January 9, the grey market premium for Jyoti CNC Automation Limited is ₹95, down from ₹100 in the previous session (January 8). The GMP serves as an indicator of the company’s performance in the unlisted market but can change rapidly.
**Subscription Status:**
– By 12:20 pm on the first day of bidding, the public issue was subscribed 1.08 times. The retail portion was oversubscribed 4.35 times, and the NII category was subscribed 100%. However, the QIB part had not received any bids by that time.
**Anchor Investors:**
– Prior to the IPO, the company raised over ₹448 crore from anchor investors on January 8. The allocated equity shares to anchor investors were priced at ₹331 per share and included participation from prominent institutions.
**Company’s Objectives:**
– Jyoti CNC Automation plans to utilize the net proceeds from the IPO to address long-term working capital needs, repay or prepay some borrowings, and for general corporate purposes.
**About the Company:**
– Established in January 1991, Jyoti CNC Automation Limited specializes in manufacturing and supplying CNC machines. Their product range includes various CNC machines catering to different machining needs.
**Financial Performance:**
– In the fiscal year 2023, the company achieved profitability with a reported profit of ₹15.06 crore compared to a loss of ₹48.3 crore the previous year. The revenue from operations increased by 24.5% to reach ₹929.3 crore.
**Book Running Managers and Important Dates:**
– The book running lead managers for the IPO are Equirus Capital Private Limited, ICICI Securities Limited, and SBI Capital Markets Limited. The registrar is Link Intime India Private Ltd.
– Share allocation is expected on January 12, 2024, with the proposed listing on BSE and NSE on January 16, 2024.
**Analyst Recommendations:**
– Reliance Securities recommends subscribing for the long term, citing improved market share, growing industry demand, diversified presence, capacity augmentation, and a strong order book.
– Anand Rathi suggests subscribing for the long term, emphasizing the favorable impact of debt repayment on profitability, revenue visibility from the order book, and the company’s presence in high-growth aerospace and defense sectors. They believe the issue is fairly priced.
In conclusion, analysts see positive prospects for Jyoti CNC Automation, with recommendations to subscribe for the long term based on factors such as market share, industry demand, financial performance, and strategic plans.
