Forge Auto International IPO

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Forge Auto International Limited is a prominent engineering company specializing in the forging and manufacturing of complex, safety-critical forged and precision-machined components. The company’s diverse product range includes components such as big rings, small rings, ball studs, gear blanks with broach, stub axle assemblies, and flange yokes, which cater to multiple industry sectors.

Forge Auto primarily serves domestic and global original equipment manufacturers (OEMs) involved in both the automotive and non-automotive sectors. The company manufactures precision-machined components tailored to customer specifications and international standards, ensuring reliability and high quality for various industries, including agriculture, railways, commercial vehicles, and more.

Product Portfolio & Key Markets

Forge Auto manufactures products for a wide array of sectors:

a) Automotive sector: Components for tractors, light vehicles, and heavy commercial vehicles.

b) Non-automotive sector: Parts for agricultural equipment, industrial tools, hydraulic systems, striking tools, and other specialized equipment.

The company’s product line includes essential components such as short fork 325HS, long fork, flange yoke 325HS (used in commercial vehicles), ball studs (used in railway bogies), and gear blanks. They also produce machined components for industries such as agriculture, railways, and commercial vehicles.

Global Presence & Expansion Strategy

Forge Auto’s international presence has significantly expanded, with revenue from the foreign industrial market growing from ₹431.19 lakhs in Fiscal 2022 to ₹1,035.92 lakhs in Fiscal 2024. During the same period, the company’s customer base in the global market grew from 3 to 11 customers, demonstrating its success in penetrating foreign markets.

As part of its growth strategy, Forge Auto is focused on expanding sales volume through diversification and geographic outreach. The company plans to leverage its expertise in engineering and product development to cater to new industrial applications. Forge Auto is also increasing its manufacturing capacity with the installation of additional machinery to expand into heavy machining and forgings for sectors such as defense, oil and gas, and aluminum forgings. This new production capacity is expected to yield 15 lakh forgings (6,132 MT annually) and will be operational by the end of September 2024.

Objects of the Forge Auto International IPO:

The Net Proceeds are proposed to be used in accordance with the details as set forth below: 1. To meet Working Capital requirements 2. Repayment of specific borrowing availed by the Company 3. General Corporate Purpose
DRHP of Forge Auto International IPO
RHP of Forge Auto International IPO

Forge Auto International IPO Details:

Open Date: Sep 26 2024
Close Date: Sep 30 2024
Total Shares: 2,880,000 shares
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue
Issue Size: 31.10 Cr.
Lot Size: 1200 Shares
Issue Price: ₹ 102 to ₹108 Per Equity Share
Listing At: NSE Emerge
Listing Date: Oct 04 2024

Promoters And Management:

Rajan Mittal is the Managing Director of our Company. He is also one of the Promoters of our Company and has been associated with our Company since its incorporation. He was also a partner in the erstwhile partnership firm “Auto International” which has been converted into our company since 2001. He holds bachelor’s degree in Science from Guru Nanak Dev University. He has around 32 years of experience in the field of business development and financial management and drives new investment and growth strategy besides managing day to day operations of our Company. Parmod Gupta is the Chairman and Whole Time Director of our Company. He is also one of the Promoters of our Company and has been associated with our Company since its incorporation. He was also a partner in the erstwhile partnership firm “Auto International” which has been converted into our company since 2001. He holds bachelor’s degree in Arts. He has the experience of around 48 years in running the forging business. Under his leadership, the company has consolidated its strength in forging with expansions within a short span of time. Ansh Jain is the Independent Director of our Company. He has been appointed on the Board of the Company since 2024. He is a qualified Company Secretary and is having around 4 years of working experience as a Company Secretary. He had been appointed as the Company Secretary of Alchemist Capital Limited from August 01, 2017 to November 30, 2019 and currently working in Eco Spin Yarns Private Limited as the Company Secretary w.e.f. September 01, 2023.

Financials of Forge Auto International IPO:

Particular (In lakh) Mar-24 Mar-23 Mar-22
Revenue from Operations 18,012 17,665 13,288
Cost of Material Consumed 11102 11291 7708
Change in Inventories -833 -1076 3
Change in work-in-progress and Stock -351 327 132
Employee Cost 1131 807 621
Other Expenses 5511 5177 4102
EBITDA 1452 1139 722
EBIDTA Margin 8.06% 6.45% 5.43%
Other income 145 99 112
Depreciation 258 207 180
Interest 410 339 280
Profit before tax 929 692 374
Tax 260 196 110
Net profit 669 496 264
NPM (%) 3.68% 2.79% 1.97%
EPS 6.13 4.54 2.42

Comparison With Peers:

Name of the Companies Revenue (Cr) Profit (Cr) EPS P/E CMP Mcap (cr)
Forge Auto International Limited 180 6.6 6.13 17.61 108 118
Balu Forge Industries Limited 560 94 9.13 76.2 807 8473
MM Forging Limited 1527 145 30.12 20 587 2835
Happy Forging Limited 1358 243 25.7 46.5 1198 11284
Samrat Forgings Ltd. 161 3 5.94 66 375 188

Lead Manager of Forge Auto International IPO:

  1. Hem Securities Limited

Registrar of Forge Auto International IPO:

  1. Bigshare Services Private Limited

Discussion on Forge Auto International IPO:

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