Jyoti CNC jumps post listing

A new listing today and a much anticipated one, especially among retail investors. The stock got listed at Rs.331 on the BSE, exact same as the IPO price of Rs.331. But post listing, it rose to Rs.372 and even further to Rs.404.75. It is currently trading at Rs.372 levels.

The IPO had met with a good response, overall subscribing 38.53 times. HNIs portion was at 36.48x, QIBs at 26.17x and Retail at 44.13x.

Jyoti CNC makes metal cutting computer numerical control (CNC) machines, used in automotive, heavy engineering, aerospace and defence industries, and enjoys 10% domestic market share and is also the 12th largest globally (0.4% global market share).Our Verdict in the IPO Analysis section - In a downturn, unabsorbed fixed costs result in huge losses, disqualifying Jyoti CNC as a long term stock for portfolio holding.  Current orders in hand keep short-to-medium term outlook positive, but fully-valued pricing discounts all possible upside in share price upon listing. We recommend ‘skipping’ the IPO as the risk reward of the highly cyclical business is unfavourable at the offer price of Rs. 331 per share.