Home » Market Spotlight » Here’s everything you need to know about Jyoti CNC Automation Limited’s IPO

Here’s everything you need to know about Jyoti CNC Automation Limited’s IPO

Jyoti CNC is the third largest company in its industry but is also loss-making. So, is this a good buy? Read further to analyse.

jyoti cnc automation ltd

Are you a stock market enthusiast interested in entering the manufacturing industry? If yes, the upcoming IPO from Jyoti CNC Automation might grab your attention! The two-decade-old Jyoti CNC is all set to go public today. Understand the company’s background, financials and IPO details to analyse if this investment opportunity suits you.

Who is Jyoti CNC Automation Ltd?

Jyoti CNC Automation Ltd is a company manufacturing CNC (Computer Numerical Control) machines. The firm is the third-largest CNC manufacturer in India and the twelfth-largest globally in terms of market share.

History

The promoters and owners of Jyoti CNC are Mr P.G. Jadeja and Mr S.L. Jadeja. The two have been involved in manufacturing machine tools since 1989 and began CNC machinery manufacturing in a full-fledged manner in 2002.

Objective

The company aims to achieve technological advancement in the area of machine tools, along with contributing significantly to society, both culturally and economically.

Vision: To customise products for customers that integrate technology and innovation.

Also read: Here’s everything you need to know about Ola Electric’s upcoming IPO

Jyoti CNC today

Jyoti CNC continues to be a leading manufacturer in its industry today, with an 8% market share in India. The company is a multinational firm operating an export wing with demand in various countries like Romania, France, Poland, Belgium, the United Kingdom, etc. 

Jyoti CNC has 29 centres with sales and services spread across the nation. The company operates with a vision to build a temple of technology.

Jyoti CNC’s financials

ParticularsFY 2023 (₹ million)FY 2022 (₹ million)FY 2021 (₹ million)
Revenue from operations9,292.597,464.875,800.59
Expenses9,552.017,918.116,616.65
Profit for the year150.60(483.00)(700.29)
Earnings per share (₹)1.02(3.28)(4.75)
Return on capital employed (%)9.50%4.85%0.47%
Debt to equity ratio (in times)10.1719.256.44
Gross fixed assets turnover ratio (in times)
1.27

1.08

0.77

Jyoti CNC Automation’s IPO details

Jyoti CNC IPO’s opening dateJanuary 09, 2024, Tuesday
Jyoti CNC IPO’s closing dateJanuary 11, 2024, Thursday
Bidding date for anchor investorsJanuary 08, 2024, Monday
Issue size₹1,000 crores
Jyoti CNC’s share price (IPO price band)₹315 to ₹331 per share
Issue typeFresh issue of 3.02 crore shares through book building
Face value per share₹2 per share
Minimum lot45 shares per lot

IPO reservations
75% – Qualified Institutional Buyers
15% – Non-Institutional Investors
10% – Retail investors

Shareholding pattern before IPO

The below list contains the names of shareholders holding more than 1% stake in Jyoti CNC before the IPO:

ShareholderPercentage of shareholding
Parakramsinh Ghanshyamsinh Jadeja31.03%
Jyoti International LLP18.63%
Anilkumar Bhikhabhai Virani16.66%
Vijay Mohanlal Parekh8.67%
Paresh Mohanlal Parekh8.67%
Sahdevsinh Lalubha Jadeja3.39%
Vikramsinh Raghuvirsinh Rana2.31%
Joint holding of Hemant J Jhaveri and Indira J Jhaveri1.27%

Fund utilisation plan

  • The company plans to utilise ₹475 crores in 2024 to repay borrowings, either wholly or in parts.
  • ₹100 crores will be used in 2024 to fund capital expenses of the firm. 
  • ₹260 crores will again be used for long-term capital needs in 2025.
  • The remaining amount based on the subscription will be diverted towards general corporate purposes.

Also read:The Indian space industry: A new frontier for growth and innovation

Should you invest in Jyoti CNC’s IPO?

Peer comparison (Figures as of March 2023)

Company
Face value (₹ per share)Revenue from operations (₹ million)EPS basic (₹ per share)NAV (₹ per share)
P/E

RONW (%)
Jyoti CNC Automation Limited
2

9,292.59

1.02

5.57


18.35%
Elgi Equipments Limited
1

30,406.98

11.72

43.27

44.30

27.04%
Lakshmi Machine Works Limited
10

47,191.49

359.47

2,189.04

37.69

16.42%
Triveni Turbine Limited112,475.505.9723.9267.7625.32%
TD Power Systems Limited
2

8,722.97

6.23

38.74

46.66

16.01%
Macpower CNC Machines Ltd102,018.9012.8996.6151.3113.34%

Consider investing because

  • CNC machines use computer programs to run tools and machinery for manufacturing. This helps in reducing manual labour and additional efforts. Jyoti CNC works in this niche segment, making this a unique investment opportunity for investors.
  • Jyoti CNC is one of the top manufacturers in the CNC industry, holding the third position in terms of market share. It also has a global presence and is ranked number twelve in terms of market share. Jyoti CNC produces various kinds of machinery spread across the CNC machine value chain.
  • The company has customers across different continents besides Asia, such as Europe, North America, etc. The company has supplied more than 30,000 CNC machines in the last 20 years, with 8,500 machines supplied in the last three years.
  • The company’s strong research and development team, works constantly to deliver customised and innovative solutions to clients. Jyoti CNC has a diverse product range consisting of basic to high-end CNC machinery. In 2007, Jyoti CNC acquired Huron Graffenstaden SAS, a pioneer in 5-Axis machine technology, to get access to global markets and increase Jyoti’s technical capabilities. Today, Jyoti CNC has 141 employees working exclusively in the R&D department.
  • Besides the above, the company has three large manufacturing facilities. Jyoti CNC is led by a strong management team having decades of experience in the CNC machinery field.

Also read: Tata Group’s game-changer: India’s biggest iPhone factory

Watch out for the following

  • The company has been at a loss in the past. FY 2023 did not see a final loss because there was a profit on the waiver of a loan. Jyoti CNC does not guarantee to incur profit in the future.
  • Jyoti CNC’s products are not meant for end-consumers. They are usually supplied to other manufacturing industries. Some of the top customers of Jyoti CNC are the aerospace and defence industries, auto and auto components industry, general engineering industry, etc. A downfall for any of these industries will adversely affect the business and revenue of Jyoti CNC.
  • The company does not have business from recurring customers as these machineries are one-time purchases. So, Jyoti CNC may or may not succeed in constantly onboarding new customers.
  • The firm has delayed making statutory payments and filing statutory reports, like audited financial statements in the past. Continuing the same way can invite troubles in the form of penalties, affecting the firm’s goodwill.  
  • Given the manufacturing nature of Jyoti’s business, any machinery breakdown can impact the firm’s operations, thereby affecting its revenue.

Bottomline

Jyoti CNC is a niche industry offering a distinct opportunity to investors. Given the size and market share of the firm, investing in Jyoti CNC might seem like a good option. However, investors must thoroughly analyse the risk factors associated with Jyoti CNC. Besides its losses, the firm has displayed delays in payments and filings. It is important for investors to analyse the causes and consequences of such actions before deciding to invest.

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StockGro Team

StockGro is India’s first and largest ‘Social Investment’ platform aimed at helping you master the art of “Trading & Investment”. Trade, Invest and get rewarded to Learn everything about ‘Investments’ the fun-filled way.

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