Jyoti CNC Automation IPO subscribed 20.5 times on day 3; IPO booked over 10x

Jyoti CNC Automation IPO received a respectable response from investors on the very first day, especially from retail, employees, and non-institutional investors (NIIs). On January 9, a Tuesday, the issue went up for bid.

In order to collect Rs 1,000 crore, Jyoti CNC Automation plans to offer 3.02 crore shares at a price range of Rs 315-331 per share. After expected allotments for interested investors on January 12, the shares will launch on the BSE and NSE on January 16. This industry leader is a well-known, international manufacturer of metal-cutting computer numerical control (CNC) equipment.

The data indicates that, out of the 1,75,39,681 stock shares given for the subscription by 12:45 pm on Thursday, January 11, investors bid for 18,38,34,810 equity shares, or 10.48 times, the amount that was solicited. Today, January 9, marks the end of the issue’s three-day bidding period, which started on Tuesday.
There was a 20.49-time subscription to the retail investor allocation and an 18.41-time subscription to the non-institutional investor part. A total of 9.78 bookings were made for the staff section. As at the same period, bids were received for the qualified institutional bidders (QIBs) quota at a rate that was 3.29 times higher.

Read More: Jyoti CNC Automation IPO is booked 4.4 times on day one. 

Jyoti CMC Automation (IPO) is scheduled for launch on January 9: Do you want to skip or subscribe?

Shares of the company are currently trading for more than Rs 95 on the unofficial gray market. The company’s shares are expected to list at Rs 426 on the stock market, which is 28.7% more than the issue price of Rs 331 considering the current grey market premium (GMP) of Rs 95.

At 3.82 times, with 0.91 times as of 11:54 am, the retail sector had the greatest subscription rate. Notwithstanding the 0.75 subscriptions made by non-institutional investors (NIIs), qualified institutional buyers (QIBs) have not yet taken part.

According to the data, by 1:30 p.m. on Tuesday, January 9, buyers bid 1.10 times more than the total number of shares available for the subscription—1,92,37,680 equity shares. The issue’s three-day bidding period ends on Thursday, January 11.

The portion allotted to retail investors witnessed a subscription of 4.39 times, compared to 1.06 times for the non-institutional investor component. 1.89 reservations were made for the staff section. On the other hand, no bids had been submitted as of the same time for the quota set aside for qualified institutional bidders (QIBs).

Jyoti CNC Automation was established in January 1991 and offers 200 different types of CNC machinery arranged into 44 series. It has a broad range of CNC machinery expertise. CNC machines, usually referred to as computer numerical control machines, are indispensable in the industrial industry.

Brokerage businesses have differing opinions regarding the Jyoti CNC Automation issue. Some suggest against long-term bidding for the issue, citing its strong business and market share, due to its low profitability, loss-making nature, and mounting debt.

JCL is dedicated to enhancing operations and has a talented leadership team with over 2,600 employees. Ventura Securities, which assigned the firm a “subscribe” rating, said that the company’s continual process engineering advances, such as plans for a cupola furnace and a specialized sand processing unit, are meant to increase productivity in their foundry operations.

Jyoti CNC Automation ultimately allotted 1,35,27,190 equity shares at a price of Rs 331 each before to going public, raising Rs 447.75 crore from anchor investors. The remaining 75% of the shares are designated for qualified institutional bidders (QIBs), with 15% going to non-institutional investors (NIIs). 10% of the net offer will be distributed to retail investors.

Hensex Securities has assigned a “subscribe for long-term” rating to the issue. The rating highlights Jyoti CNC’s focus on technology, ability to deliver creative solutions supported by specialized R&D facilities, well-diversified global customer base across end-user industries, and vertically integrated operations that facilitate customization and production efficiencies.

However, it identified the primary business risks as the company’s losses, its history of negative return on equity, its high debt equity ratio, low debt service coverage ratio, enormous debt servicing liabilities, and substantial debt.