Jyoti CNC Automation IPO sails through on day 1; retail portion booked 4.4 times

The initial public offering (IPO) of Jyoti CNC Automation saw a decent response from the investors during the first day of the bidding process, particularly by retail, employees and non-institutional investors (NIIs). The issue had kicked-off for bidding on Tuesday, January 09. The Gujarat-based Jyoti CNC Automation is selling its shares in the price band of Rs 315-331 apiece with a lot size of 45 shares and its multiples thereafter. The company is looking to raise a total of Rs 1,000 crore via its primary offering, which is entirely a fresh shares sale of up to 3,02,11,480 equity shares. According to the data, the investors made bids for 1,92,37,680 equity shares, or 1.10 times, compared to the 1,75,39,681 equity shares offered for the subscription by 12.30 pm on Tuesday, January 9. The three-day bidding for the issue will conclude on Thursday, January 11.

Also read: Top 5 stocks to watch on January 9, 2024: BEML, Dr Reddy's, Delta Corp and more The allocation for retail investors was subscribed 4.39 times, while the portion reserved for non-institutional investors saw a subscription of 1.06 times. The employee portion was booked 1.89 times. However, the quota set aside for qualified institutional bidders (QIBs) was yet to attract any bids for as of the same time. Jyoti CNC Automation, established in January 1991, is a manufacturer and supplier of CNC machines, which is specialized in a diverse range of CNC machines, offering 200 types across 44 series. CNC machines are computer numerical control machines, which play an important role in the manufacturing industry. Brokerage firms have a mixed view on the issue of Jyoti CNC Automation. A few suggest to bid for the issue in the longer run citing its strong business and market share, while others suggest to avoid the issue on the back of low profitability, loss making nature of business and mounting debt. With an adept leadership team and a workforce of over 2,600, JCL remains dedicated to operational enhancements, exemplified by ongoing process engineering advancements such as plans for a cupola furnace and a specialized sand processing unit, aiming to bolster efficiency in their foundry operations, said Ventura Securities with a 'subscribe' rating on the issue. Ahead of its IPO, Jyoti CNC Automation has raised Rs 447.75 crore from anchor investors as it finalized allocation of 1,35,27,190 equity shares at a price of Rs 331 apiece. 75 per cent shares have been reserved for qualified institutional bidders (QIBs), while 15 per cent shares shall go to non-institutional investors (NIIs). Remaining 10 per cent of the net offer shall go to retail investors. Jyoti CNC has well diversified global customer base spread across end-user industries, focus on technology and ability to deliver innovative solutions bolstered by dedicated R&D facilities, Vertically integrated operations which enables customization and production efficiencies, said Hensex Securities with a 'subscribe for long-term' rating on the issue. However, it cited the company's losses, negative return on equity in the past, significant indebtedness and carrying substantial debt servicing obligations & high debt equity ratio and a low debt service coverage ratio as the key risks for the business. Equirus Capital, ICICI Securities, and SBI Capital Markets serve as the book running lead managers for the Jyoti CNC Automation IPO, with Link Intime India acting as the registrar. The company's shares are set to be listed on both the BSE and NSE on Tuesday, January 16, 2024. 

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