Jyoti CNC Automation Limited

Jyoti CNC Automation Limited-IPO DETAILS 

Company Overview 

The Company, ranking as the third-largest producer of metal-cutting computer numerically controlled (CNC) machines globally, holds a 10% market share in India and a 0.4% share internationally. Specializing in the manufacturing of 5-axis CNC Machines, it offers a diverse portfolio of over 200 variants across 44 series, including CNC Turning Centers, turn-mill centers, and vertical and horizontal machining centers. With over 20 years of expertise in designing and manufacturing tools for industries such as Aerospace, defense, Auto Components, and General Engineering, the company has established itself as a key player. It serves international markets, supplying to countries like Romania, France, Poland, Belgium, Italy, and the United Kingdom. 

The Company operates three manufacturing facilities, with two located in Rajkot, Gujarat, and one in Strasbourg, France. Each facility has its own Research and Development center, collectively employing 141 skilled professionals. Notable domestic clients include industry giants like Bharat Forge, Tata Advanced Systems, and Shakti Pumps (India), while foreign customers include Bosch Ltd, Turkish Aerospace, and Hawe Hydraulics, among others. In terms of revenue distribution for FY23, the Automotive segment emerged as the primary contributor, accounting for 46.68%. Aerospace & defense and General Engineering contributed 20.32% and 19.58%, respectively. The Company's top three clients jointly contributed 14% of its FY23 revenue, while the top five clients accounted for 16%. The top 10 clients collectively contributed 20.08% of the Company's revenue in FY23. 

Objective of the IPO 

Here are a few quick reasons why company is going public:  

1. The Company intends to allocate Rs. 475 Crore from the net proceeds of the Issue for the prepayment of specific debts incurred.  

2. The remaining capital will be directed towards addressing the Term Working Capital needs of the Company and fulfilling general corporate purposes. 

Company Financials 

Key Performance Indicator 

Pros 

1. A prominent CNC machine manufacturer both in India and on a global scale, the Company stands out with its extensive product range tailored for various industries. 

2. The Company's business segments are diversified, encompassing Aerospace, Automotive, general engineering, EMS (Electronics Manufacturing Services), and dies & molds. 

3.  A key feature of the Company's operations is its integration across manufacturing units, ensuring that all aspects of the production process are handled internally, thereby eliminating the need for third-party involvement. 

4.  As of Q2FY23, the Company boasts a substantial order book totaling Rs. 3,315 Crore, with Rs. 1,896 Crore attributed to the Aerospace & Defense segment. This robust order book reflects the Company's strength and prominence in serving the specific needs of the Aerospace & Defense industry. 

Cons 

1. The Company's reliance on its Top 3 clients has heightened, contributing 32% of the revenue in H1FY24 and 13.95% in FY23. This indicates an increased exposure to major clients in the recent quarters. 

2.  Despite turning profitable in FY23, Jyoti CNC has experienced a sluggish rate of profit growth in the first half of the current fiscal year.  

3. Additionally, the Company is grappling with a substantial debt burden, reflected in its debt-to-equity ratio of 3.25x. A debt-to-equity ratio exceeding 2x is considered significantly leveraged, posing potential risks to the Company's financial stability.  

4. Furthermore, a noteworthy concern is the fact that 50% of the Company's total assets are tied up in inventory, coupled with a slow Inventory Turnover ratio. Addressing these inventory-related challenges may be crucial for optimizing the Company's asset utilization and overall financial performance. 

How to Apply for this IPO 

1. Go to https://ipo.adityatrading.in/ 

2. Enter your Client ID 

3. Enter the OTP received in your registered mobile number. 

4. Choose the IPO and click on apply button. 

5. Enter the UPI ID, Quantity, and Cut off the price. 

6. Click on submit button 

7. Confirm the mandate request received on your phone by entering the UPI Pin. 

You can also watch our youtube video on “How to Apply on IPO” by clicking on the link “https://www.youtube.com/watch?v=1qOI8dCpl1I&ab_channel=ATS”