The Jyoti CNC Automation IPO hit the market on January 9, signaling the return of the IPO season. In just one day, it gained massive traction, getting subscribed 2.52 times, mainly due to the enthusiastic response from everyday investors. Interestingly, the retail investors’ portion was oversubscribed by a staggering 8.28 times!
This IPO, belonging to Jyoti CNC Automation Limited, showcases a company deeply involved in manufacturing and supplying CNC machines. Based in India, they’re dedicated to creating and delivering CNC machinery
Their product range includes versatile multi-tasking machines, simultaneous 3-axis and 5-axis CNC machining centers, CNC turning centers, CNC turning-milling centers, as well as CNC vertical machining centers (VMCs) and CNC horizontal machining centers (HMCs)
The company’s promoters include Vikramsinh Raghuvirsinh Rana, Parakramsinh Ghanshyamsinh Jadeja, Sahdevsinh Lalubha Jadeja, and Jyoti International LLP.
In the fiscal year spanning from March 31, 2022, to March 31, 2023, Jyoti CNC Automation experienced a notable upswing with a 27% surge in revenue and a remarkable 131.18% increase in profit after tax (PAT).
The company’s listed peers are Elgi Equipments Ltd (with a P/E of 44.30), Lakshmi Machine Works Ltd (with a P/ E of 37.69), Triveni Turbine Ltd (with a P/E of 67.76), TD Power Systems Ltd (with a P/E of 46.66), and Macpower CNC Machines Ltd (with a P/E of 51.31), as per Red Herring Prospectus (RHP).
Jyoti CNC Automation IPO details :
The Jyoti CNC IPO, valued at ₹1,000 crore, solely comprises a fresh issue without any offer for sale (OFS) component, as outlined in the RHP.
The net proceeds raised from this offering are earmarked for specific objectives: catering to the company’s long-term working capital requirements, repaying or partially prepaying some of the existing borrowings, and allocation towards general corporate purposes.
Furthermore, Jyoti CNC Automation expressed in its RHP that the listing of equity shares on stock exchanges is anticipated to bring several advantages. These include boosting the company’s visibility and brand recognition among both current and prospective customers, as well as establishing a public market for the company’s equity shares within India.”
“The book running lead managers for the Jyoti CNC Automation IPO are Equirus Capital Private Limited, ICICI Securities Limited, and SBI Capital Markets Limited. Additionally, the registrar handling this process is Link Intime India Private Ltd.
Jyoti CNC Automation IPO review :
The global market for CNC machines is forecasted to witness a compound annual growth rate (CAGR) of 10.3% from 2023 to 2027. Analysts attribute this surge to the escalating adoption of automation and advanced software solutions across key sectors like automotive and heavy industries. These industries are leveraging these technologies to fulfill customer demands, especially amid a shortage of skilled labor available at competitive rates.
The company aims to leverage its expertise in developing CNC machining centers with up to five axes, strategically positioning itself to take advantage of the growing opportunities in the expansion of 4-6 axis machining centers, both on a global scale and within India.
The brokerage expressed a positive outlook, citing factors like enhanced market share, increasing industry demand, widespread presence across various sectors, continuous capacity expansions, and efforts towards improving the financial risk profile by repaying specific debts. They also highlighted a robust order book of 3310 crores slated for execution over the next few years as favorable indicators for the company’s future prospects. Consequently, they recommend a “SUBSCRIBE” rating for long-term investment considerations.
Marwadi Financial Services forecasts the company to debut at a P/E (Price/Earnings) ratio of 500x, sporting a market capitalization of Rs. 75,275 million, considering the FY23 EPS of Rs. 0.66 on a post-issue basis. Comparatively, its peers such as Elgi Equipments Limited, Lakshmi Machine Works Limited, Triveni Turbine Limited, TD Power Systems Limited, and Macpower CNC Machines Ltd are trading at significantly lower P/E ratios of 42.4x, 35.2x, 57.4x, 37.8x, and 46.3x, respectively.
The brokerage has recommended a “Subscribe” rating for this IPO based on the company’s prominent position as a leading CNC machine manufacturer globally. They highlight its well-diversified customer base spanning various industries as a key factor in their recommendation.
Jyoti CNC Automation IPO GMP today :
The Jyoti CNC Automation IPO’s Grey Market Premium (GMP) or grey market activity stands at +77, mirroring the previous session. This suggests that Jyoti CNC Automation shares were being traded at a premium of ₹77 in the grey market, as reported by investorgain.com.
Factoring in the upper end of the IPO price band along with the current grey market premium, the anticipated listing price for Jyoti CNC Automation shares is estimated at ₹408 each. This projection indicates a 23.26% increase from the IPO price of ₹331.
The ‘Grey Market Premium’ essentially reflects investors’ willingness to pay a price higher than the issue price, showcasing an early sentiment toward the stock.
Disclaimer: The ideas and suggestions shared earlier are from different experts and analysts, not from IPO Premiums. It’s important for investors to talk to certified experts or financial advisors before making any investment decisions to make sure they’re making smart choices based on their own financial goals and how much risk they can handle