Forge Auto International
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 26 Sep 2024 – 30 Sep 2024
- Listing date
- 04 Oct 2024
- Face value
- ₹10 per share
- Issue price
- ₹108 per share
- Lot size
- 1,200 shares
- Issue type
- Book Building issue
- Listing at
- NSE
- Total issue size
- ₹31.10 Cr
- Market cap at offer price
- ₹118 Cr
- Promoter holding
- 100.00% → 73.63% pre-issue → post-issue
- ISIN
- INE0YKW01013
- Registrar
- Bigshare Services Pvt.Ltd.
- Lead managers
- Hem Securities Ltd.
- Registered office
- Village Mangarh, Kohara, Machhiwara Road, Punjab
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Anchor investor · within QIB | 8,18,400 | — | — |
| Market maker | 1,46,400 | — | — |
Application size
Minimum 1,200 shares per lot, in multiples, at ₹108
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 1,200 | ₹1,29,600 |
| S-HNI (min) | 2 | 2,400 | ₹2,59,200 |
| S-HNI (max) | 7 | 8,400 | ₹9,07,200 |
| B-HNI (min) | 8 | 9,600 | ₹10,36,800 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Anchor investors
Institutional allocation placed a day before the issue opens, carved out of the QIB portion and locked in after listing.
Valuation and performance
Valuation at offer price
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 8.32 | 6.13 |
| P/E (×) | 12.98 | 17.62 |
| Price to book (×) | 4.17 | — |
| Market cap | — | ₹118 Cr |
Key performance indicators
- Return on net worth
- 32.14%
- ROCE
- 17.60%
- Debt / equity
- 1.94
- PAT margin
- 3.71%
- NAV per share
- ₹25.88
- Price to book
- 4.17
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Forge Auto International
Forge Auto International Limited, originally formed as a partnership firm 'M/s Auto International' in 2001, was converted into a private limited company in April 2023 and subsequently into a public limited company in June 2024. The company manufactures complex and safety-critical forged and precision machined components such as big ring, small ring, big ball stud, gear blank with broach, stub axle assembly, and flange yoke, catering to domestic and global original equipment manufacturers (OEMs) engaged in automotive and non-automotive sectors including agriculture parts, hydraulic parts, and striking tools. The company serves a diversified customer base across multiple industries and derives revenue from operations in commercial vehicles, farm equipment, industrial applications, and off-highway vehicles.
Company Analysis
from RHPForge Auto International Limited is an engineering company engaged in forging and manufacturing of complex and safety-critical, forged and precision-machined components for the automotive, tractor, railway, and non-automotive sectors.
Forge Auto International Limited, originally formed as a partnership firm 'M/s Auto International' in 2001, was converted into a private limited company in April 2023 and subsequently into a public limited company in June 2024. The company manufactures complex and safety-critical forged and precision machined components such as big ring, small ring, big ball stud, gear blank with broach, stub axle assembly, and flange yoke, catering to domestic and global original equipment manufacturers (OEMs) engaged in automotive and non-automotive sectors including agriculture parts, hydraulic parts, and striking tools. The company serves a diversified customer base across multiple industries and derives revenue from operations in commercial vehicles, farm equipment, industrial applications, and off-highway vehicles.
Objects of the Issue
- To meet Working Capital requirements ₹1,900.00 lakhs p.21
- Repayment of certain borrowing availed by our Company, in part or full ₹500.00 lakhs p.21
- General Corporate Purpose p.21
- To meet Working Capital requirements ₹1,900.00 lakhs p.69
- Repayment of certain borrowing availed by our Company, in part or full ₹500.00 lakhs p.69
- General Corporate Purpose p.69
Issue Structure
- Total Issue
- ₹[●] lakhs
- Fresh Issue
- up to 28,80,000 Equity Shares aggregating up to ₹[●] lakhs
- Offer for Sale
- Nil
- Price Band
- ₹[●] to ₹[●] (Floor Price to Cap Price)
- Lot Size
- [●] Equity Shares and in multiples of [●] Equity Shares thereafter
- Face Value
- ₹10 per Equity Share
Business Model
The company manufactures and supplies forged and precision machined components to original equipment manufacturers (OEMs) and other customers based on purchase orders and customer specifications. The business model involves design and prototype development based on customer requirements, pre-qualification processes, and supply of components in accordance with customer delivery schedules and specifications. The company also engages in export operations, deriving a portion of revenues from international markets.
Business Segments
SWOT Analysis
- • Established business presence in forging and precision machining(p.21)
- • Long operating history before conversion to public company(p.30)
- • Multiple quality certifications and compliance standards(p.31)
- • Revenue growth and profitability improvement(p.37)
- • Diversified customer base across multiple industry sectors(p.21)
- • Integrated manufacturing with diversified product portfolio across automotive and non-automotive sectors(p.92)
- • Strong revenue growth trajectory with rising EBITDA margins(p.95)
- • Established manufacturing capacity and modern equipment(p.95)
- • Strong return on equity and capital efficiency metrics(p.79)
- • Diversified and integrated manufacturing with 20,000 MT forging and 25 lakh units machining capacity(p.98)
- • Long-standing relationships with key customers and suppliers across multiple industries(p.98)
- • Track record of consistent revenue growth with CAGR of 18.04% over three years(p.99)
- • Experienced promoters with 48 years and 32 years of industry expertise(p.96)
- • Multiple quality certifications including ISO 9001:2015, IATF 16949:2016, and ZED GOLD award(p.96)
- • Improved EBITDA margins from 5.31% (FY2021) to 7.62% (FY2024)(p.99)
- • Strong revenue growth trajectory(p.178)
- • Improved EBITDA margins over time(p.178)
- • Diversified product portfolio across sectors(p.178)
- • International certifications and quality standards(p.179)
- • Established forging and machining capacity(p.178)
- • Strong profitability growth(p.183)
- • Dependency on limited customer base for majority of revenue(p.27)
- • No long-term purchase agreements or price commitments from customers(p.28)
- • Heavy reliance on few suppliers for primary raw material (steel)(p.28)
- • High debt burden and dependency on personal guarantees from promoters(p.28)
- • Limited operating history as a public company(p.30)
- • Working capital intensive business with significant inventory and receivables(p.30)
- • Concentration of manufacturing in single facility(p.31)
- • Contingent liabilities related to corporate guarantees(p.35)
- • Statutory compliance failures and penalties(p.38)
- • Delays in filing statutory returns(p.39)
- • High debt burden with significant borrowing obligations(p.72)
- • Low cash position relative to operational needs(p.47)
- • Dependence on few large customers (concentrated customer base risk)(p.92)
- • Thin profit margins despite revenue growth(p.79)
- • Heavy concentration in top 5 customers representing 69.70% of total revenue(p.98)
- • High dependence on raw material suppliers with 59.37% of purchases from top 5 suppliers(p.98)
- • Significant financial leverage with short-term borrowings of Rs. 2,610.14 lakhs(p.138)
- • Recent foraying into new sectors (hydraulic, castor wheel, industrial goods) with unproven track record(p.96)
- • High concentration of customer base(p.185)
- • Elevated debt-to-equity ratio(p.170)
- • Significant doubtful receivables(p.159)
- • Dependence on promoters for strategic direction(p.179)
- • High working capital requirements(p.159)
- • Concentrated promoter shareholding(p.149)
- • Growth in Indian automobile component exports(p.21)
- • Strong domestic OEM market growth(p.21)
- • India achieving auto component trade surplus(p.21)
- • Expansion into new geographic and customer markets(p.37)
- • Growth in commercial vehicle segment(p.29)
- • Growing domestic automobile sector and EV market expansion(p.90)
- • Export opportunities with India becoming global auto component sourcing hub(p.91)
- • Government policy support through PLI schemes and manufacturing incentives(p.91)
- • Capacity expansion and diversification into new segments(p.70)
- • Favorable demographic and economic trends supporting vehicle demand(p.90)
- • Expansion of export markets from 3 customers (FY2021) to 11 customers (FY2024) with growth potential(p.99)
- • Capacity expansion with additional 15 lakh forging (6,132 MT per annum) units planned for commercial production by September 2024(p.100)
- • Focus on high-value advanced products with higher profit margins and early-mover advantages(p.100)
- • Diversification across multiple industry sectors (automotive, railways, defence, agriculture, construction)(p.96)
- • Growth in domestic and international forging market driven by industrial expansion(p.99)
- • Expansion into non-automotive segments(p.179)
- • International market penetration(p.179)
- • Growing auto sector demand(p.183)
- • Value addition through higher machining intensity(p.178)
- • Expanded customer base across geographies(p.179)
- • Exposure to cyclical demand from automobile and related industries(p.29)
- • Dependence on continuous power and fuel supply(p.29)
- • Vulnerability to raw material price fluctuations(p.28)
- • Intense competition in fragmented forging industry(p.30)
- • Risk of disruption from labour strikes and wage demands(p.31)
- • Foreign exchange volatility affecting exports(p.34)
- • Exposure to international trade risks(p.31)
- • Risk of dependency on government incentive schemes(p.38)
- • Transport cost inflation and service disruptions(p.32)
- • Risk of regulatory and compliance changes(p.20)
- • Economic slowdown affecting demand across domestic and global markets(p.43)
- • Global financial instability and geopolitical tensions(p.42)
- • Natural disasters and adverse weather conditions impacting operations(p.43)
- • Regulatory changes and compliance requirements creating operational uncertainty(p.43)
- • Infrastructure limitations and supply chain disruptions(p.44)
- • Political instability affecting economic policies and market conditions(p.43)
- • Exposure to commodity price volatility for raw materials (carbon/alloy steel)(p.103)
- • Competition from larger organizations with greater financial resources and underutilized capacity(p.103)
- • Dependence on uninterrupted power supply for manufacturing operations(p.103)
- • Exposure to foreign exchange fluctuations on export sales (5.75% of total sales)(p.96)
- • Regulatory and compliance requirements for quality, safety and environmental standards(p.104)
- • Sector cyclicality and economic sensitivity(p.180)
- • Raw material price volatility(p.180)
- • Competitive pressures in forging industry(p.185)
- • Technology disruption risks(p.180)
- • Regulatory and compliance risks(p.180)
- • Key person dependency risks(p.180)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Parmod Gupta | Promoter | 45.92% | 33.81% |
| Rajan Mittal | Promoter | 41.82% | 30.79% |
| Rajan Mittal | Promoter | 41.82% | 30.79% |
| Parmod Gupta | Promoter | 45.92% | 33.81% |
| Rajan Mittal and Sons HUF | Promoter Group | 10.75% | 7.91% |
| Parmod Kumar Gupta and Sons HUF | Promoter Group | 1.37% | 1.01% |
| Parmod Gupta | Promoter | 45.92% | — |
| Rajan Mittal | Promoter | 41.82% | — |
| Rajan Mittal | Promoter | 41.82% | — |
| Parmod Gupta | Promoter | 45.92% | — |
| Rajan Mittal and Sons HUF | Promoter Group | 10.75% | — |
Leadership
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.