Considering the upper price band of Rs 331, the stock is expected to list at a premium of 12%
However, it is important to note that grey market premiums are just an indicator as to how the company’s shares are stacked up in the unlisted market and are subject to change rapidly.
“The company has carved a niche with its diverse product range and tailored solutions. However, financial hiccups, including past losses and a negative return on equity, cast a shadow on Jyoti’s otherwise attractive profile. The hefty P/E ratio of 324.5x, significantly higher than the industry average of 50x, further amplifies the risk factor,” said Shivani Nyati, Head of Wealth, Swastika Investmart.
The IPO of Jyoti CNC Automation received a healthy response from investors with 38.5 times overall subscription.
Net proceeds will be used for repayment of some of its loans, for funding long-term working capital requirements and general corporate purposes.
Jyoti CNC Automation is one of the world’s leading manufacturers of metal-cutting computer numerical control (CNC) machines with the third largest market share in India accounting for approximately 10% market share in FY23.With an expertise built over 2 decades and R&D capabilities, it delivers customised solutions to industries including aerospace and defence, auto and auto components, general engineering, EMS, dies and moulds, and others.
The company has a robust order book of Rs 3,300 crore, that will be executed over the span of next few years. Its other strengths include diversified product portfolio and customer base, strong global outreach and the ability to use technology to good effect to capture growing market opportunities.
The company posted revenue and EBITDA at a CAGR of 27% and 75%, respectively over FY21-23. From a net loss of Rs 70 crore in FY21, it posted a profit of Rs 15 crore in the fiscal 2023.
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