Jyoti CNC Automation lists at 12% premium: Should you buy more, hold, or book profit?

Jyoti CNC IPO: The Rs 1,000 crore IPO, received a strong response from investors

Shares of Jyoti CNC Automation made a decent debut on January 16, listing at an 11.8 percent premium over the IPO price of Rs 331, though the stock missed the analyst expectation of a 15-18 percent boost. The stock opened at Rs 370 on the NSE and Rs 372 on the BSE.

The Rs 1,000-crore IPO received strong response from investors and was subscribed 38.5 times between January 9 and 11th. Qualified institutional buyers (QIB) were at the forefront, picking up 44.13 times their allotted quota. Retail investors bought 26.1 times and high net-worth individuals (HNI) purchased 36.4 times their allotted quota.

Also read: 15-20 unicorns to go public in 2 years, expect 10+ decacorns by 2025: Kotak Investment Banking

The price band for the public offer, which was entirely a fresh issue of 3 crore shares, was fixed at Rs 315-331 per share. The manufacturer and supplier of metal-cutting computer numerical control (CNC) machines will use the proceeds to finance long-term working capital needs, repay some of the loans and the remaining amount will be used for general corporate purposes.

Should you buy, sell or hold Jyoti CNC stock?

Swastika Investmart: Book-profit

While Jyoti CNC's strong brand presence and robust market share are undeniable, its financial concerns and hefty valuation necessitate a cautious approach.

The debut was positive but overshadowed by concerns. “We recommend investors book profit and exit their position; however, those who still want to hold it, should keep a stop loss at around the issue price,” said Shivani Nyati, head of wealth at Swastika Investmart Ltd.

Indsec Securities: Hold

“Investors should hold on to the stock after listing and can add more to catch the defence and aerospace cycle which can be played through this stock,” said Saral Seth, VP at Indsec Securities.

Mehta Equities: Hold for long-term

The company has a strong order book from aerospace and defence, giving healthy visibility on topline and bottomline and growing demand in the CNC machine industry. The primary objective of the IPO of reducing debt will further help the company to come out of interest burdens leading to improving the bottom lines in coming years.

Also Read: Medi Assist Healthcare IPO: Should you subscribe to Rs 1,171.58 crore issue?

“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 a 3-5 years time horizon,” said Prashanth Tapse, senior vice-president for research and research analyst at Mehta Equities Ltd.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.