Jyoti CNC Automation will hit the bourses on 16 January. The automation company’s shares were trading at a premium of Rs 38 a share or 11.5% in the grey market. The stock is expected to list for Rs 369 per share from its issue price of Rs 331.
The grey market is an unofficial market where shares trade before the allotment and listing.
The company’s initial public offering for subscription opened on January 09 at a price band of Rs315-331 per share and closed on 11 January. The issue worth Rs1,000 crore was a completely fresh issue.
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For the qualified institutional investors, around 75% of the offer was reserved. While 15% for high net-worth individuals and 10% for the retail investors. The company also reserved shares worth Rs 5 crore for the employees.
The company will be utilising these net proceeds to repay loans, fund long-term capital requirements, and general corporate purposes.
Jyoti CNC Automation is one of the world’s leading manufacturers of metal-cutting computer numerical control machines, with the third largest market share in India, approximately 10% in FY23. The company has a diverse portfolio of CNC machines built over 2 decades of presence.
On the financial front, the company reported a consolidated revenue of Rs929 crore in FY23, up 24% from the same period a year ago.
“Considering bullish sentiments in the markets touching fresh life time high along with overwhelming response received from all sets of investors on the last day of subscription, Jyoti CNC signals decent listing gain of 15% on its issue price,” said Prashanth Tapse, senior vice president of research & research analyst at Mehta Equities.
The listing premium is justified on the back of strong order book from aerospace and defence given healthy visibility on topline as well as bottom line and growing demand in the CNC machine industry. We also like the primary objective of the IPO which is for reducing the debt helping the company to come out of interest burdens leading to improve the bottom lines in coming years, Tapse said.
“Considering all the factors, we recommend allotted investors to HOLD for Long term. For non allottees one can wait and watch for any dips post listing to accumulate and look to hold for a long term like 3-5 years’ time horizon,” Tapse added.