Jyoti CNC Automation’s High-Stakes IPO: Will it Soar or Stumble at Rs 315-331 Price Band?

In a significant development for the Indian financial markets, Jyoti CNC Automation, a leading manufacturer of metal-cutting computer numerical control (CNC) machines, has announced the pricing details for its highly anticipated initial public offering (IPO). The company has fixed the price band for its IPO at Rs 315-331 per share, aiming to raise a substantial Rs 1,000 crore through this offering.

Also See: Jyoti CNC Automation IPO GMP

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The bidding for the Jyoti CNC Automation IPO is scheduled to commence on January 9 and will remain open for subscription until January 11, 2024. Prior to that, the anchor book will be opened for a day on January 8.

It’s noteworthy that the Jyoti CNC Automation IPO comprises only a fresh issue component, meaning that the entire proceeds from the IPO will directly benefit the company. Additionally, the company has allocated Rs 5 crore worth of shares for its employees, offering them at a discount of Rs 15 each to the final issue price.

Also Read: Jyoti CNC Automation Set to Debut on Dalal Street with Rs 1,000-Crore Fresh Issue IPO on January 9

Jyoti CNC Automation, headquartered in Rajkot, is a prominent supplier of diverse portfolios of CNC machines, serving various industries such as aerospace, defense, and medical. In the fiscal year 2023, the company captured the third-largest market share in India, accounting for approximately 10 percent of the market.

With manufacturing facilities in Gujarat and one in France, Jyoti CNC is also a leading manufacturer of simultaneous 5-Axis CNC machines in India. Over the last three fiscal years, the company has supplied more than 8,400 CNC machines to over 3,500 customers in India, Asia (excluding India), Europe, North America, and other parts of the world.

As of September 2023, Jyoti CNC Automation boasts an impressive order book worth Rs 3,315.33 crore, including Rs 304.92 crore worth of orders from an entity in the electronics manufacturing services (EMS) industry.

Also Read: When Can a Company Go for IPO in India

On the financial front, the company has shown remarkable growth, turning profitable with a net profit of Rs 15.06 crore for the fiscal year ending in March FY23, a significant turnaround from the previous year’s loss of Rs 48.3 crore. This profitability was driven by robust topline growth, operating margin improvement, other income, and exceptional income (profit on loan waiver).

In FY23, the company’s revenue from operations reached Rs 929.3 crore, representing a substantial 24.4 percent increase over the previous year. The EBITDA (earnings before interest, tax, depreciation, and amortization) surged by 34 percent year-on-year to reach Rs 97.4 crore, with a margin expansion of 74 basis points at 10.47 percent.

For the first six months ending in September FY24, Jyoti CNC reported a net profit of Rs 3.35 crore on a revenue of Rs 509.8 crore.

The IPO allocation is structured with 75 percent reserved for qualified institutional buyers, 15 percent for high-net-worth individuals, and the remaining 10 percent for retail investors. Retail investors can bid for a minimum of 45 equity shares and in multiples of 45 shares thereafter. The minimum application size for retail investors will be Rs 14,895 for 45 equity shares, with a maximum investment limit of Rs 2 lakh.

Also Read: Upcoming IPOs in 2024: 11 expected issues in the new year; check out the full list

Following the closure of the IPO subscription period, the company plans to finalize the basis of allotment of IPO shares by January 12, with the equity shares set to be credited to successful investors’ demat accounts by January 15. The stock is expected to commence trading on the stock exchanges on January 16, marking the first public issue and listing in the new year of 2024.

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