Jyoti CNC IPO subscribed 2 times on Day 1; ₹447 cr raised from anchor investors

Jyoti CNC Automation Ltd's initial public offer (IPO) was fully subscribed on the first day of its opening on Tuesday. The public issue worth ₹1,000 crore will close on January 11, 2023. The price band for the IPO has been fixed at ₹315 –331, with a discount of ₹15 for all eligible employees.

The consolidated bid details on the NSE show the issue has been subscribed 2.06 times by 4 PM on Day 1 on Tuesday, with bids placed for 3,24,58,725 shares compared to 1,75,39,681 on offer. The retail individual investors (RIIs) have subscribed to the issue a maximum of 7.42 times, while the non-institutional investors quota has been subscribed 2.12 times. The quota reserved for qualified institutional buyers(QIBs) is yet to fully subscribe, with bids placed for 25,065 shares compared to 94,76,190 on offer.

The anchor investor report shows the company has finalised the allocation of 1,35,27,190 shares to anchor investors at an anchor investor allocation price of ₹331 per equity share, including a share premium of ₹329 apiece. The company has garnered around ₹447.7 crore from anchor investors. Of the total allocation of 1,35,27,190 shares to the anchor investors, 52,90,650 shares or 39.11% were allocated to 9 domestic mutual funds.

The company has reserved 75% of the issue for qualified institutional investors, 15% for non-institutional investors while up to 10% of the quota has been reserved for retail investors. The 100% book-building issue can be subscribed to 45 equity shares and in multiples thereof. Equirus Capital Private Limited, ICICI Securities Limited, and SBI Capital Markets Limited are the book-running lead managers of the issue, Axis Bank, and HDFC Bank are the sponsor banks.

The shareholding pattern shows post issue, 62.55% of the stake in the company will be held by the promoter and promoter group, while 37.45% of shareholding will be owned by the public and employees. The post-issue m-cap of the company is expected to be ₹7,212-7,527 crore. The company aims to repay around ₹475 crore in certain borrowings availed by the company, while it aims to use ₹360 crore to fund long-term working capital requirements of the company.

Jyoti CNC Automation claims to be one of the world’s leading manufacturers of metal-cutting computer numerical control (CNC) machines, accounting for around 10% of the market share in India in FY23 and the 12th largest market share globally.

The company is a prominent manufacturer of simultaneous 5-Axis CNC machines in India and a supplier of one of the most diverse portfolios of CNC machines, including CNC turning centres, CNC turn-mill centres, CNC vertical machining centres (VMCs), CNC horizontal machining centres (HMCs), simultaneous 3-Axis CNC machining centres, simultaneous 5-Axis CNC machining centres and multi-tasking machines.

It operates out of three manufacturing facilities, two in Rajkot, Gujarat and one in Strasbourg, France, which are equipped with capabilities to design, develop and manufacture a product portfolio. It has diversified customers across various industrial areas such as aerospace and defence, auto and auto components, general engineering, EMS, dies and moulds, and others.

During H1 FY24 and the last three financial years, it has supplied over 8,400 CNC machines to over 3,500 customers in India and across Asia, excluding India, Europe, North America and the rest of the world. As of H1 FY24, the company had an order book of ₹3,315.3 crore, including an order of ₹305.2 crore from an entity in the electronics manufacturing services industry.