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Jyoti CNC Automation IPO Details: Date, Share Price, Size, GMP & Review

Jyoti-CNC-AutomationIPO-Details-Date-Share-Price-Size-GMP-&-Review

Jyoti CNC Automation Limited – About the Company

Incorporated in January 1991, Jyoti CNC Automation Limited is the manufacturer and supplier of computer numerical control (CNC) machines with a specialization in making CNC machines that includes CNC turning centres, CNC turning-milling centres, CNC horizontal machining centres (HMCs), CNC vertical machining centres (VMCs), simultaneous 5-axis CNC machining centres, simultaneous 3-axis CNC machining centres and multi-tasking machines.

Jyoti CNC Automation operates with 2,573 employees and has three manufacturing facilities, out of which two are situated in Rajkot, Gujrat, and another in Strasbourg, France, that is capable of designing, developing and producing the entire product range.

The company is the third largest (CNC) maker with a market share of 10% in India and the twelfth largest with a market share of 0.4% globally. As of June 30, 2023, the total production capacity of the company was 4,400 machines per year in India and 121 machines per year in France. And has an order book of around Rs 31,43 crore, which is comprised of an individual order of Rs 2,60.25 crore from an electronic manufacturing services (EMS) company.

The company produce wide-ranging CNC machines of up to 200 types in different 44 series and since April 1, 2004, the company has delivered over 30,000 CNC machines worldwide. Over the past three years company has supplied more than 8,400machines to over 3,500 customers globally including North America, Europe and some regions of Asia.

The customer base of Jyoti CNC Automation includes top companies in India and overseas like ISRO, Tata Advances System, Tata Sikorsky Aerospace, Bharat Forge,  Shreeram Aerospace & Defense, Shakti Pumps (India), Unipart's India, Festo India, Harsha Engineers, BrahMos Aerospace Thiruvananthapuram, National Fittings, Elgi Rubber, HAWE Hydraulics, Bosch Limited, Rolex Rings, Turkish Aerospace, and various other more companies.

To distribute or supply the CNC machines to these customers, the company has Huron's well-established dealer network across the country. Moreover, it also has 29 sales and service centres in the UK, France, Italy Belgium, Poland and Romania.

Jyoti CNC Automation IPO Objectives

As the entire issue of Rs 1000 crore will be a fresh issue, hence the whole fund will go to the company, as no promoters are selling their stake. As per the red herring prospectus, out of the funds raised from this IPO around Rs 475 crore will be used for Repayment and/or pre-payment, in full or part, of certain borrowings availed by our Company.

Also Read: What is IPO: How it Works & Everything Else You Need To know

While. Rs 360 crore will be used to meet the funding of long-term working capital requirements of our company. However, the remaining part of the fund will be also used for general corporate purposes and bear the expenses of this IPO issue.

Jyoti CNC Automation IPO Details:

IPO Open Date 9-Jan-24
IPO Close Date 11-Jan-24
Basis of Allotment 12-Jan-24
Listing Date 16-Jan-24
Face Value Rs 2 per share
Price Rs 315 to Rs 331 per share
Lot Size 45 Shares
Total Issue Size [30,211,480] shares
(aggregating up to Rs 1,000.00 crore)
Fresh Issue [30,211,480] Shares, aggregating up to Rs 1,000.00 crore
Offer For Sale No Offer for Sale
Issue Type Book Built Issue IPO
Listing At BSE & NSE
QIB Shares Offered Not less than 75% of the Net Issue
Retail Shares Offered Not more than 10% of the Net Issue
NII (HNI) Shares Offered Not more than 15% of the Net Issue

 

Jyoti CNC Automation IPO Issue Price & Size

The issue price of Jyoti CNC Automation IPO is Rs 315 to Rs 331 per share, which means investors can bid between these lower and upper price bands. While the total issue size of Jyoti CNC Automation IPO is Rs 1,000 crore that will be entirely a fresh issue.

The company is going to issue around 30,211,480 equity shares of Rs 2 face value each and investors can apply with the lot size in the multiple of 45 shares.

Jyoti CNC Automation IPO Launch Date

Jyoti CNC Automation IPO will be open on 09 January 2024 and the last date is 11 Jan 2024, which means you can bid or apply for the IPO between 09 Jan to 11 Jan 2024.

However, as per the resources, the tentative date for the basis of allotment of Jyoti CNC Automation IPO is 12 Jan 2024, and the listing date is 16 Jan 2024. Refunds or money and allotment of credited shares into the demat account will be done by 15 Jan 2024.

Jyoti CNC Automation Financial Statements:

Particulars (Rs in Million) FY24 (6M) FY23 FY22 FY21 CAGR
Revenue from Operations 5,098.22 9,292.59 7,464.87 5,800.59 26.57%
Other Income 7.07 233.41 35.74 100.33
Total Income 5,105.29 9,526.00 7,500.61 5,900.92 27.06%
Operational Expenses 3613.10 6988.53 5615.22 4503.41
Other expenses 741.11 1330.28 1123.04 980.28
EBITDA 744.01 973.78 726.61 316.90 75.29%
EBITDA Margin% 14.59% 10.48% 9.73% 5.46%
Depreciation 156.01 336.18 357.86 377.84
Interest 491.85 897.02 821.99 755.12
Exceptional Item - 304.50 - -
Profit/Loss Before Tax 103.22 278.49 (417.50) (715.73)  
Total tax 69.70 127.90 65.50 (15.44)
Profit/Loss After Tax 33.52 150.59 (483.00) (700.29)  
PAT Margin% 0.66% 1.62% -6.47% -12.07%  
EPS Basic (Rs) 0.19 1.02 (3.28) (4.75)  

Source: Jyoti CNC Automation RHP

Jyoti CNC Automation Financial Performance

As per the draft red herring prospectus and red herring prospectus field with SEBI, the Revenue of Jyoti CNC Automation for the last six months of the current financial year (FY24) or you can say Sep ended 2023 stood at Rs 509.82 crore. The EBITDA and Net Profit of the company for the same period stood at Rs 74.40 crore and Rs 3.35 crore respectively.

For the full year (FY23) the revenue of the company was Rs 929.26 crore which has increased with a CAGR growth of 26.57% from Rs 580.06 crore in FY21. However, owing to better operating margins company has registered a CAGR growth of 75.3% from Rs 31.69 crore in FY21 to Rs 74.40 crore in FY23. The EBITDA margin of the company was 5.46% in FY21 that is thanks to optimizing the operating expenses the same has improved to 14.6% in FY23.

However due to higher interest costs, the company has registered a loss of around Rs 70.03 crore in FY21, though, the company has managed to register a profit of Rs 15.06 crore in FY23. And for the first six months of FY24, the net profit was Rs 3.35 crore with the PAT margin of 0.66%. The PAT margin of the company for the full year FY23 is around 1.62%.

Jyoti CNC Automation IPO Promoters & Shareholding of the Company

Parakramsinh Ghanshyamsinh Jadeja

and Jyoti International LLP are the main promoters of the company holding 31.03% and 18.63% stakes respectively in the company. While other promoters Sahdevsinh Lalubha Jadeja and Vikramsinh Raghuvirsinh Rana hold 3.39% and 2.31% stakes in the company. Anil kumar Bhikhabhai Virani is the promoters group having a 16.66% stake in the company. For other shareholders' details check the table below.

S.No. Name of the Shareholder No. of Equity Shares on a fully diluted basis (Pre-offer) % of Equity Share Capital on a Fully Diluted basis (%)
  Promoters:    
1 Parakramsinh Ghanshyamsinh Jadeja 61,188,760 31.03%
2 Jyoti International LLP 36,748,995 18.63%
3 Sahdevsinh Balubha Jadeja 6,685,400 3.39%
4 Vikramsinh Raghuvirsinh Rana 4,547,500 2.31%
  Total (A) 109,170,655 55.36%
       
  Promoters Group:
5 Anil kumar Bhikhabhai Virani 32,856,340 16.66%
  Total (B) 32,856,340 16.66%
 
  Public or Other Shareholdings:
6 Vijay Mohanlal Parekh 17,098,705 8.67%
7 Paresh Mohanlal Parekh 17,098,705 8.67%
8 Joint  holding  of  Hemant  J  Jhaveri and Indira J Jhaveri 2,500,000 1.27%
  Total (C) 36,697,410 18.61%
 
  Grand Total (A+B+C) 178,724,405 90.63%

Source: DRHP & RHP

Why Invest in Jyoti CNC Automation IPO?

If you are looking to invest in the Jyoti CNC Automation IPO you need to consider various factors while applying for any IPO. As there are various positive and negative factors based on which the growth of the company depends, you should know before investing in any company that either is launching the IPO or already listed in the secondary market.

Also Read: What to Check Before Buying IPO: Things to Know & Is it Safe

You need to analyse the competitive strength of the company that helps to grow its business. At the same time also analyses the various risk factors that can affect the business growth and revenue of the company. We brought here, the strengths and weaknesses or risk factors that are associated with Jyoti CNC Automation while operating its business.

Competitive Strengths:

  • With the growth of the economy, the demand in the industrial sector is also growing. The rise of demand in industrial automation acts as one of the major factors driving the growth of Computer-Aided Manufacturing (CAM) in machine tools will escalate the demand for CNC machines in the industrial sector.
  • With a market share of 10% Jyoti CNC Automation is the third largest manufacturer of metal cutting (CNC) machines in India. With a market share of 0.4% in the same field, it is the twelfth largest manufacturer of CNC machines. Further taking advantage of the growing industry demand company is focused on improving the market share in the industry.
  • In the last three years, the company has supplied over 8,400 machines to more than 3,500 customers in India and across Asia (excluding India), North America, Europe, and the rest of the world. The company has well diversified global customer base spread across end-user industries.
  • The company has a diverse portfolio of products and supplies a diverse portfolio of CNC machines further, its products range from entry-level CNC machines to sophisticated multi-axis machines is a testament to the constant focus on technology and drive to continually provide customised solutions to our customers.
  • The company is catering to well-known companies from a wide range of industries such as Aerospace and defence, Auto and auto Components, General Engineering, Dies and Moulds and EMS and further looking to expand its presence across other end-user industries and diversify the customer base and geographical reach.
  • The acquisition of Huron Graffenstaden SAS, a pioneer across the world in the 5-Axis machining technology is bolstering the technological capabilities and establishing the presence on a global scale including the access, and the ability to cater, to global customers across key industries such as aerospace, defence and other high-end engineering applications.
  • As of September 30, 2023, the company has an order book of Rs 3315.33 crore into various end-user industries. Further company intends to continuously augment its capacity in line with the anticipated business growth and is expected to utilise such augmented capacity including by executing the order book in a timely.
  • Further, the Company proposes to utilize an estimated amount of Rs 475 crore from the Net Proceeds raised through this IPO towards full or partial repayment or pre-payment of certain borrowings availed by the company will help to reduce the outstanding indebtedness and debt servicing costs and enable the utilization of its internal accruals for further investment in the business growth and expansion, that can be utilized to increase the production capacity.
  • At the financial end, in the last three years, the company has improved its revenue growth with a CAGR of 25.57% from FY21 to FY23. The company has improved its operating margins during the same period resulting in EBITDA growing at a CAGR of more than 75% for the same period. Though, in FY21 and FY22, the company incurred a loss but in FY23 and the first six months of FY24, it became a profitable company with improved net margins.

Also Read: What are the Risk Factors Involved in Applying for an IPO

Risks Factors:

  • The business of the company is dependent on the performance of the Application Industries with a large portion of revenue being derived from a select few of Application Industries. Any downturn in the Application Industries can adversely impact the business operations and revenue of the company.
  • The company has a customer base of well-known companies, due to making quality products, hence, failure to meet quality standards required by its customers for its products and processes may lead to the cancellation of existing and future orders will not only make the company liable for the monetary warranty claims but also affect the revenue growth and market share of the company.
  • Maintaining a sufficient inventory of input materials is another critical factor for the company to ensure the smooth operations of the company. Any failure to effectively manage the inventory of input materials and finished products in response to changing market scenarios may lead to the loss of materials and increase the operating cost will directly affect the operating as well as net margins of the company.
  • On the supply side, completely reliant on third-party logistics service providers for the transport of input materials and finished products. If such third-party logistics service providers discontinue their services for a reasonable length of time and, if the company is unable to obtain the services of other service providers, it will adversely impact its business operations.
  • Furthermore, the company doesn't have long-term agreements with suppliers for the input materials and any significant increase in the cost of, or a shortfall in the availability, or deterioration in the quality, of such input materials, could have an adverse effect on the business operations of the company.
  • At the customer end, the business growth of the company's success is dependent on the relationship with its customers, and the company has not entered into long-term purchase contracts. This kind of unsecured relationship with the clients exposes the company to risk originating from the inability to retain the established customers as our clients resulting in the revenue from such customers being affected.
  • The company has incurred significant indebtedness and carries substantial debt-servicing obligations. And company has a high debt-equity ratio and a low debt-service coverage ratio. If the company does not manage to generate a sufficient amount of cash flows from operations, the liquidity and ability to service the indebtedness could be adversely affected by the financial conditions of the company.
  • In the past few years company has incurred losses and consequently, had a negative return on equity in the same period. Hence, such losses in future could have an adverse impact on the growth prospects and would also prevent the company from declaring dividends that will also affect the value of equity shares of the company.
  • Last but not least, there are certain outstanding legal proceedings (including criminal proceedings) running against the company its promoters, directors, and subsidiaries. Hence, during the legal proceedings, any kind of unfavourable verdicts or legal actions against the company or its promoters or directors will not only affect the reputation of the company but also have a material adverse effect on the business growth and its financial condition.

Jyoti CNC Automation IPO Grey Market Premium (GMP)

Grey Market Premium (GMP) is the premium price over the issue price of an IPO. The GMP is defined as the demand and supply of shares in the grey market. The grey market is an unofficial ecosystem where shares start trading much before the allotment and the listing of the shares. However, you can track the GMP to get an idea of the listing price.

Also Read: What is Grey Market Premium in IPO: How is GMP Calculated &Reliable

As per the various resources, the Jyoti CNC automation IPO GMP is trading at a premium of Rs 85 in the unlisted market. However, the GMP can fluctuate as per the demand and supply in the grey market till the date of the listing. You must not completely rely on the GMP to determine the share price of an unlisted company, as there are various factors that affect the stock market and the share price of the listed companies that you should understand.

Also Read: What are the Top Factors Affecting the Stock Market in India

Jyoti CNC Automation IPO Review & Analysis

Jyoti CNC Automation IPO was launched at a price range of Rs 315 to Rs 331 per share, and as per the full-year financial results, the earnings per share (EPS) of the company for FY23 was Rs 1.02. On the basis of this EPS and while considering the upper price band of Rs 331, the share of Jyoti CNC Automation stands at price to earnings ratio (P/E) of 325.

On the other hand, all listed peers like Elgi Equipments Limited, Triveni Turbine Limited, TD Power Systems Limited, Lakshmi Machine Works Limited, and Macpower CNC Machines Ltd are trading at an average P/E of 50x showing that the valuation of Jyoti CNC Automation share is very expensive compared to its listed peer group companies.

Also Read: Types of Risks Associated with Investing in the Stock Market

Hence, you can avoid applying in the Jyoti CNC Automation IPO, especially if you are looking to earn profit from the listing or earn short-term gain from your investment. Here you can only invest in Jyoti CNC Automation only from the long-term investment point of view. And, if you want to apply for the Jyoti CNC Automation IPO, read the next paragraph.

How to Apply for Jyoti CNC Automation IPO?

Applying for the Jyoti CNC Automation IPO becomes very easy and trouble-free if you choose the best online trading platforms like Moneysukh offers. To apply for this IPO, through Moneysukh, you just need to open a trading account and demat account here. And once you become a customer of Moneysukh, you can enjoy various other benefits of trading here.

Moneysukh is one of the best discount brokers in India, offering the best trading platform for trading and investing in equities, commodities and currency. Here you can trade with the best online trading app using the TradingView charting system and trading software or algorithms like Trade Radar, TradeTron, Quantman, AlgoBulls Keev, FoxTrader etc.

Also Read: How to Use Traderadar for Option Strategies as Market Conditions

Apart from applying for IPOs or investing in the stock market (secondary market), you can also get an online facility to trade in high-frequency trading. Moneysukh offers an Algo-trading facility to use the best algo-trading platform to trade with the best intraday algo-trading strategy at the lowest brokerage charge in options trading in India or any other segments.

Also Read: How to Start Algo Trading in Moneysukh: A Best Algo Trading Platform

However, right now if you have demat and trading account with Moneysukh and looking to apply for this IPO, you can follow the steps given below.

Steps to Apply for Jyoti CNC Automation IPO:

Step 1: Jyoti CNC Automation IPO to open on 09 Jan 2024 for online bidding.

Step 2: Now open trade.moneysukh.com and log in with your User ID & password.

Step 3: Go to the IPO section and select the Jyoti CNC Automation IPO.

Step 4: Now just fill in the various details like price, quantity, and so on.

Note: When you applying any IPO, make sure to bid at the cutoff price and then submit your application. 

Step 5: Now make the required payment and then submit your IPO application successfully.

How to Check Jyoti CNC Automation IPO Allotment Status?

Just like applying for the IPO, checking the allotment status through Moneysukh is also very easy and trouble-free. But you can check the allotment status of Jyoti CNC Automation IPO only after 12 Jan 2024, as on this date basis of allotment will be decided. To check the allotment status of Jyoti CNC Automation IPO you can visit on NSE, BSE or Moneysukh.

Also Read: How to check IPO allotment status on NSE, BSE through Moneysukh

If the Jyoti CNC Automation IPO is oversubscribed many times due to huge demand among the bidders, then there are fewer chances of getting the allotment of shares. If you are applying for an IPO through the retail category or HNI category and if it is oversubscribed, then you need to improve the allotment chances by following the tips while investing in the IPOs.

Also Read: How to Increase the Chances of IPO Allotment

And owing to oversubscription of IPO, if you don’t get the allotment of any shares, then the IPO application money will be refunded back into your bank account or the fund will be unblocked if you have applied through ASBA. However, if you have been allotted any shares, then they will be transferred into your bank account before the date of listing. You can book profits if the shares of Jyoti CNC Automation are listed at a premium or keep with the long-term outlook.

Also Read: How to Identify Trend in Stock Market: 10 Points to Find Trend

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