Jyoti CNC Automation IPO Day 2: GMP steady, check review, other key details. Should you subscribe?
Jyoti CNC Automation Limited is a CNC machine manufacturer and supplier. The business is headquartered in India and focuses on producing and distributing CNC machinery.
Also Read: Jyoti CNC Automation IPO: Issue fully booked on day 1, retail portion subscribed 8.28x
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The product line consists of multi-tasking machines, simultaneous 3-axis and simultaneous 5-axis CNC machining centres, CNC turning centres, CNC turning-milling centres, CNC vertical machining centres (VMCs), and CNC horizontal machining centres (HMCs).
Also Read: Jyoti CNC Automation IPO: GMP, subscription status, review, other details. Apply or not?
The company’s promoters are Vikramsinh Raghuvirsinh Rana, Parakramsinh Ghanshyamsinh Jadeja, Sahdevsinh Lalubha Jadeja, and Jyoti International LLP.
Between the fiscal year ending on March 31, 2023, and March 31, 2022, Jyoti CNC Automation witnessed a 27% increase in revenue and a 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
Jyoti CNC IPO, which is worth ₹1,000 crore, is completely a fresh issue; there is no offer for sale (OFS) component, according to RHP.
The company plans to use the net proceeds from the fresh offering for the following purposes: to finance the company’s long-term working capital needs; to pay back and/or prepay, in full or in part, some of the borrowings that the company has taken out; and for general corporate purposes.
“In addition, our company expects to receive the benefits of listing of equity shares on the stock exchanges including enhancing our company’s visibility and brand image among our existing and potential customers and creating a public market for our company’s equity shares in India,” said Jyoti CNC Automation in its RHP.
The Jyoti CNC Automation IPO’s book running lead managers are Equirus Capital Private Limited, ICICI Securities Limited, and SBI Capital Markets Limited, and the registrar is Link Intime India Private Ltd.
Jyoti CNC Automation IPO reviewÂ
Reliance SecuritiesÂ
The market for CNC machines worldwide is predicted to grow at a compound annual growth rate (CAGR) of 10.3% between 2023 and 2027.
 The brokerage attributes this growth to the increasing use of automation and sophisticated software solutions by major industries, including automotive and heavy industries, to meet their customers’ needs in addition to the shortage of skilled labour at competitive prices.Â
The company hopes to benefit from its experience in creating CNC machining centres with up to five axes and from its strategic position to capitalise on the expansion of 4-6 axis machining centres both internationally and in India.
“With improved market share, growing industry demand, diversified presence, augmenting capacities at regular intervals and improving financial risk profile by repaying certain debt, strong order book of 3310 crores to be executed over the span of next few years augurs well for the company. Hence we suggest a SUBSCRIBE rating for the long term,” the brokerage said.
Marwadi Financial ServicesÂ
According to the brokerage, the company will list at a P/E of 500x with a market cap of Rs. 75,275 million, taking into account the FY23 EPS of Rs. 0.66 on a post-issue basis. In contrast, its peers, Elgi Equipments Limited, Lakshmi Machine Works Limited, Triveni Turbine Limited, TD Power Systems Limited, and Macpower CNC Machines Ltd, are trading at a P/E of 42.4x, 35.2x, 57.4x, 37.8x, and 46.3x.
“We assign “Subscribe” rating to this IPO as the company is one of the leading CNC machine manufacturing companies globally with a well-diversified global customer base spread across end-user industries,” the brokerage said.Â
Also Read: Jyoti CNC Automation IPO opens today: GMP, issue details, 10 key things to know
Jyoti CNC Automation IPO GMP today
Jyoti CNC Automation IPO GMP or Jyoti CNC IPO grey market premium is +77, similar to the previous session. This indicates Jyoti CNC Automation share price were trading at a premium of ₹77 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Jyoti CNC Automation share price was indicated at ₹408 apiece, which is 23.26% higher than the IPO price of ₹331.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Also Read: Jyoti CNC Automation raises ₹448 crore from anchor investors ahead of IPO
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
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Published: 10 Jan 2024, 09:37 AM IST
