The IPO of Jyoti CNC Automation has opened. The price band for this IPO of Rs 1000 crore has been fixed at Rs 315 to Rs 331. Only new shares will be issued in IPO, there will be no Offer for Sale (OFS). The company supplies its machines to many big companies in the aerospace and defense sector. Know here some important information and expert opinion before investing in IPO.
Important things related to IPO
- Issue will open: 9 January
- Issue closed: 11 January
- Issue size: Rs 1,000 crore
- Price Band: Rs 315-331
- Fresh issue: Rs 1,000 crore
- Expected Listing Date: 16 January 2024
Where will the money be used?
The funds raised from the IPO will be used to repay the company’s debt, meet long-term working capital needs as well as for general corporate purposes.
Jyoti CNC Automation manufactures ‘Metal Cutting Computer Numerical Control Machines’. The company had about 10% market share in FY23, making it the third largest company in its sector.
After the issue, the promoter’s stake in the company will reduce from 72.1% to 62.5%, while the public shareholding will increase to 37.5%.
How has been the performance so far in FY24?
The net profit of Jyothi CNC was Rs 15 crore in FY23. Whereas there was a loss of Rs 48 crore in FY22. Whereas in FY23 the income increased to Rs 929 crore. The company’s profit in the first half of FY24 was Rs 3 crore, while the income was Rs 510 crore.
What are experts saying on IPO?
The company’s valuation at the upper end of the price band is Rs 7,527 crore. According to a note by Anand Rathi, ‘Since the company is going to use most of the funds raised from the IPO to repay the debt, which will reduce the interest expenses, hence it will have a positive impact on the profits.’
The brokerage believes that ‘earnings will increase due to the larger size of the order book. Most of the company’s income comes from the aerospace and defense industry, which are very fast growing sectors. We believe that the pricing of the IPO is right, and we are giving subscribe long term rating to the IPO.
The company’s customer base includes many big companies including ISRO, BrahMos Aerospace, Turkish Aerospace, Uniparts India, Tata Advanced Systems.
