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About 47 per cent of the ₹1,000 crore that Rajkot-based Jyoti CNC Automation Ltd plans to raise through its proposed IPO will be used to service existing debt, said Parakramsinh Jadeja, Chairman and Managing Director of the company on Friday.
“The IPO is a fresh issue. Out of the ₹1,000 crore we plan to raise, close to ₹475 crore we plan to use in repaying our debt. An additional ₹365 crore will be used to fulfil our working capital requirements and the rest will be used in investing in future developments which includes opportunities in EMS (Electronic Manufacturing Services) and aerospace and defence sectors,” Jadeja said while addressing media persons in Ahmedabad.
The debt includes existing working capital loans, long-term debts and term loans, added Jadeja, who is a first generation entrepreneur, who started off at Rajkot in 1989 by taking ₹33,000 loan to buy a lathe machine to start operations. Today, the company has two manufacturing units at Rajkot and a third in France.
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The company currently supplies metal cutting Computer Numerical Control (CNC) machines to entities like Space Applications Centre-ISRO, BrahMos Aerospace, MBDA, Turkish Aerospace, Tata Advanced System Ltd, Tata Sikorsky Aerospace Ltd, Bharat Forge Ltd, among a host of other customers. It is the third largest manufacturer accounting for 10 per cent of the market share in India.
“Currently, we have an order book of about ₹3,315 crore of which 57 per cent of the orders are from the aerospace and defence sectors. The share of orders from defence and aerospace sector was at 22 per cent last year,” Jadeja said adding that the orders from the sector are of “higher value” when compared with orders from the automobile sector.
“We have supplied more than 30,000 CNC machines to customers since 2004,” said Jadeja who runs operations of the company with his family members. The company had acquired Huron Graffenstaden SAS of France in 2007.
The IPO will open on January 9. The price band for the issue has been fixed from ₹315 per equity share to ₹331 per equity share. Bids can be made for a minimum of 45 equity shares and multiples of 45 equity shares, thereafter. The issue will close on January 11.
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