Introduction: Jyoti CNC Automation, a global leader in metal-cutting CNC machines, is set to open its Initial Public Offering (IPO) for subscription on January 9, 2024. The company, with the third-largest market share in India, is offering ₹1,000 crore through a complete offer for sale.
Price Band and Premium: The IPO has a price band of ₹315-331 per share, and as of the day before the subscription begins, the company's shares are trading at a healthy premium of ₹85 in the unlisted market.
Grey Market Premium (GMP): Investors keenly follow the Grey Market Premium (GMP) as an unofficial indicator of the listing price. Currently, the GMP for Jyoti CNC Automation signals positive momentum, which may translate into a strong listing.
Offer Details: Investors can bid for a minimum of 45 shares in one lot, with the offering divided into 75% for qualified institutional buyers, 15% for high net-worth individuals, and 10% for retail investors.
Employee Reservation: Jyoti CNC has set aside ₹5 crore worth of shares for its employees, offering them at a discount of ₹15 each from the final issue price.
Utilization of Proceeds: The net proceeds from the IPO will be allocated towards repaying some of the company's loans, funding long-term working capital requirements, and general corporate purposes.
Company Overview: Jyoti CNC Automation holds the third-largest market share in India, accounting for approximately 10% in FY23. With vertically integrated operations, the company serves major customers such as ISRO, BrahMos Aerospace, and MBDA.
Financial Performance: In FY23, the company reported a significant turnaround, posting a net profit of ₹15.06 crore compared to a loss of ₹48.3 crore in the previous fiscal year. The profitability surge was attributed to robust revenue growth, operating margin improvements, other income, and exceptional income from the profit on loan waiver.
Revenue and Order Book: Jyoti CNC witnessed a 24% surge in revenues to ₹929 crore in FY23. As of June 30, 2023, the company boasts an impressive order book of ₹3,143 crore.
Listing Schedule: Equirus Capital, ICICI Securities, and SBI Capital Markets are the book-running lead managers, and the equity shares will be listed on BSE and NSE on January 16, marking the first public issue and listing of the year 2024.
Conclusion: With positive GMP signals and a robust financial performance, Jyoti CNC Automation's IPO is poised to attract investor interest. The company's strong market position and utilization of proceeds for strategic purposes add to the appeal of this offering in the new year.
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