Give a brief explanation of initial public offerings (IPO) and their importance in the financial sector. Describe Jyoti CNC Automation Ltd IPO, and its standing in the sector. Emphasize the interest and excitement that have been generated by its IPO.
Jyoti CNC Automation Ltd IPO Overview
| Jyoti CNC Automation Ltd IPO Date | January 9, 2024 to January 11, 2024 |
| Jyoti CNC Automation IPO Listing Date | January 16, 2024 |
| Jyoti CNC Automation IPO Price | INR 315 to 331 per share |
| Jyoti CNC Automation IPO Lot Size | 45 Shares |
| Jyoti CNC Automation IPO Total Issue Size | Approx INR 1,000 crore |
| Jyoti CNC Automation IPO Basis of Allotment | January 12, 2024 |
| Jyoti CNC Automation IPO Initiation of Refunds | January 15, 2024 |
| Jyoti CNC Automation IPO Credit of Shares to Demat | January 15, 2024 |
| Jyoti CNC Automation IPO Issue Type | Book Built Issue IPO |
| Jyoti CNC Automation IPO Listing At | BSE, NSE |
About Jyoti CNC Automation Ltd.
One of the world’s top producers of metal-cutting Computer Numerical Control (CNC) machines, Jyoti CNC Automation Ltd. holds the third-largest market share in India, making up around 10% of the Indian market in FY 2023, and the 12th-largest market share worldwide, making up 0.4% of the global market share in CY 2022.
Providing a wide range of CNC machines, such as CNC Turning Centers, CNC Turn Mill Centers, CNC Vertical Machining Centers (VMCs), and CNC Horizontal Machining Centers (HMCs), it is an Indian manufacturer of simultaneous 5-axis CNC machines. The company serves a wide range of industries, including general engineering, automotive components, die and mold industries, EMS, and the defense and aerospace sectors. The company had ₹33,153.26 million in its order book as of September 30, 2023.
From 2023 to 2027, the global market for CNC machines is expected to grow at a compound annual growth rate (CAGR) of 9.9%. The primary cause of this anticipated growth is the rise in the manufacturing sector, which is being fueled by the adoption of computer-aided manufacturing and industrial automation.
Fundamental Analysis
- Revenue Growth: Over the previous three years, Jyoti CNC has consistently increased its revenue, a sign of positive momentum and market demand for its goods and services.
- Equity and Liabilities: Between 2021 and 2022, there was a notable decline in equity and an increase in liabilities, which could be attributed to several things including debt, restructuring, or other financial activity. But in 2023, the company’s liabilities and equity both rose, suggesting that the financial structure may be stable.
- Profitability: In terms of profitability, Jyoti CNC has been trending upward, going from losses in 2021 and 2022 to a noteworthy profit in 2023. Profit and Loss After Tax has improved, pointing to possible growth opportunities and improved operational efficiency.
- Return on Net Worth (RoNW): The Return on Net Worth (RoNW) has demonstrated a noteworthy improvement, rising from negative percentages to 18.35% in 2023. This indicates a more efficient use of shareholder funds to generate profits.
- Debt Equity Ratio: The debt-to-equity ratio has dropped from 2022 to 2023, suggesting a lessened dependency on debt; however, the percentage is still quite high. Because of a greater reliance on debt financing, a higher ratio denotes a higher level of financial risk.
- Asset and Liability Management: The expansion of the business and possibly higher resource investment are indicated by the increases in total assets and liabilities.
- Net Asset Value (NAV): The NAV increased from 2022 to 2023, but it’s important to remember that it’s still relatively low, which could mean that the intrinsic value per share is lower.
- Ratios: Even though it is gradually rising, the current ratio is less than 1, suggesting possible liquidity issues. On the other hand, an improvement in the inventory turnover ratio suggests effective inventory management.
Jyoti CNC Automation Ltd IPO Allotment Structure
- Qualified Institutional Buyers (QIB): 75% of the shares made available through the IPO will be set aside for Qualified Institutional Buyers by SEBI regulations. These include organizations like insurance companies, mutual funds, and banks.
- Non-Institutional Investors (NII): Non-Institutional Investors will be the sole holders of 15% of the shares. Usually, these consist of individuals or corporate entities making investments exceeding Rs. 2 lakhs.
- Retail Individual Investors (RII): Retail Individual Investors will receive the remaining 10% of the shares. These individual investors submit applications for shares valued at less than two lakh rupees.
- Eligible Employees: A portion of the deal is exclusive to staff members.
Jyoti CNC Automation Ltd IPO Risks and Challenges
Auto and auto component sales account for nearly 46% of the company’s total revenue. Any loss of clients will have an impact on the business’s operations.
The cost of the materials used accounts for nearly 56% of the company’s total expenses, and there is no long-term contract in place between the company and the supplier.
The business competes in its industry. Reduced operating margins or a smaller market share could result from ineffective competition.
How to Apply for Jyoti CNC Automation Ltd IPO?
- Create a Demat and Trading Account: You must create a Demat and trading account with a Brokers account if you don’t already have one.
- Verify IPO Details: After your account has been activated, go to the Alice Blue platform’s IPO section to find the Jyoti CNC Automation Limited IPO details.
- Put in a bid: Indicate how many shares you want to purchase and stick to the IPO’s price range when placing your bid.
- Apply: Verify all of your information, then submit your application.
How to Check Jyoti CNC Automation Ltd IPO Allotment Status?
- Log in to your Borkers Account: Using their trading app or the Borkers Account website, you can accomplish this.
- Navigate to the Portfolio or IPO Section: The structure of the Borkers Account platform may cause this to vary, but in general, the ‘Portfolio’ or ‘IPO’ section is where you can find the status of your IPO application.
- Find the IPO Allotment Status: Search for a subsection labeled “IPO Allotment Status” or a comparable name. The status of the IPOs you have applied for is visible here.
- Select the Jyoti CNC Automation Limited IPO: You may be able to choose the initial public offering (IPO) that interests you from a list or dropdown menu if you have applied to more than one IPO. Decide on the IPO for Jyoti CNC Automation Limited.
- Check the Status: This is where your application’s status should be shown. This section would indicate whether or not you have been assigned shares.
FAQ of Jyoti CNC Automation Ltd IPO
Q1. When will the subscription period for Jyoti CNC Automation Ltd IPO open?
A. On January 09, 2024, the IPO subscription window will open.
Q2. To approve Jyoti CNC Automation Ltd IPO’s UPI mandate request, how do I do so?
A. By logging into your UPI handle and approving the payment mandate, you must finish the payment process.
Q3. Which Price Range is Included Jyoti CNC Automation Ltd IPO?
A. Jyoti CNC Automation Limited’s initial public offering (IPO) has a price range of INR 315 to 331 per share.
Q4. What Was The Amount Of Jyoti CNC Automation Ltd IPO?
A. Jyoti CNC Automation Limited is getting ready to start an initial public offering (IPO) in which the public will be guaranteed new equity shares valued at INR 1000 crores. The money raised will be used by the company to pay down debt, finance long-term working capital, and cover other general corporate needs.