Forge Auto International IPO: Invest at ₹102-₹108; Check IPO Dates Now!

Incorporated in 2001, Forge Auto International Limited is an engineering company that forges and manufactures complex, safety-critical, forged, and precision-machined components for the auto industry (automobiles, tractors, railways) and non-auto sectors (agriculture parts, hydraulic parts, striking tools). The company serves domestic and global original equipment manufacturers (OEMs) engaged in manufacturing for both the automotive and non-automotive sectors. The company's manufacturing facility has an installed capacity of 20000MT for forging and 25 lakh units for the machining section. As of 31st March 2024, the company has 366 permanent employees in various departments.

The Objectives of the Issue

Forge Auto International Limited intends to utilise the Net Proceeds from the Issue towards the following objectives:

1. To meet Working Capital requirements
2. Repayment of specific borrowing availed by the Company
3. General Corporate Purpose

Highlights of Forge Auto International IPO

Forge Auto International IPO is set to launch with a book-built issue of ₹31.10 crores. The issue is entirely fresh. Here are the key details of the IPO:

• The IPO opens for subscription on 26th September 2024 and closes on 30th September 2024.
• The allotment is expected to be finalised on 1st October 2024.
• Refunds will be initiated on 3rd October 2024.
• Credit of shares to Demat accounts is also expected on 3rd October 2024.
• The company will tentatively list on NSE SME on 4th October 2024.
• The price band is set at ₹102 to ₹108 per share.
• The fresh issue comprises 28.8 lakh shares, aggregating to ₹31.10 crores.
• The minimum lot size for the application is 1200 shares.
• Retail investors need to invest a minimum of ₹129,600.
• The minimum investment for HNI is 2 lots (2,400 shares), amounting to ₹259,200.
• Hem Securities Limited is the book running lead manager for the IPO.
• Bigshare Services Pvt Ltd serves as the registrar.
• Hem Finlease is the market maker for the IPO.

Forge Auto International IPO Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 30th September 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors are advised to complete their applications well before this deadline to avoid any last-minute technical issues or delays.

Forge Auto International IPO Issue Details/Capital History

Forge Auto International IPO is scheduled from 26th September to 30th September 2024, with a price band of ₹102 to ₹108 per share and a face value of ₹10. The total issue size is 28,80,000 shares, raising up to ₹31.10 crores through a fresh issue. The IPO will be listed on NSE SME. The pre-issue shareholding is 80,40,000 shares.

Forge Auto International IPO Allocation & Minimum Investment Lot Size

The IPO shares are allocated across different investor categories as follows:

Investors can place bids for a minimum of 1200 shares, with additional bids required in multiples of this figure. The table below illustrates the minimum and maximum investment amounts for retail investors and HNIs, expressed in shares and monetary values.

SWOT Analysis: Forge Auto International Ltd

Strengths:

• Long-standing presence in the industry since 2001
• Diverse product portfolio catering to both auto and non-auto sectors
• Strong manufacturing capacity of 20000MT for forging and 25 lakh units for machining
• Multiple quality certifications including ISO 9001:2015, ISO 14001:2015, and IATF 16949:2016

Weaknesses:

• High dependence on the automotive sector
• Significant debt-to-equity ratio of 1.94

Opportunities:

• Growing demand in the automotive and non-automotive sectors
• Potential for expansion into new geographical markets
• Increasing focus on precision-machined components in various industries

Threats:

• Fluctuations in raw material prices
• Intense competition in the engineering and auto components sector
• Economic slowdowns affecting the automotive industry

Financial Highlights: Forge Auto International Ltd

Below are the financial results for the Fiscal years FY24, FY23, and FY22:

Forge Auto International Limited has shown steady growth in recent years. The company's revenue increased by 2% and profit after tax (PAT) rose by 35% between the financial year ending with March 31, 2024 and March 31, 2023.

Assets have shown significant growth, increasing from ₹5,677.94 lakhs in FY22 to ₹10,148.67 lakhs in FY24, representing a growth of about 78.7% over two years.

Revenue has seen steady growth, rising from ₹13,400.28 lakhs in FY22 to ₹18,157.3 lakhs in FY24, marking an increase of 35.5% over two years.

The company's profitability has improved significantly. Profit After Tax increased from ₹264.34 lakhs in FY22 to ₹668.88 lakhs in FY24, representing a substantial growth of 153% over two years.

Net Worth has shown consistent growth, increasing from ₹1,367.73 lakhs in FY22 to ₹2,020.88 lakhs in FY24, a growth of about 47.8% over two years.

Total Borrowings have increased from ₹2,620.16 lakhs in FY22 to ₹4,046 lakhs in FY24, which represents an increase of about 54.4% over two years. This increase in borrowings, coupled with growing assets and revenue, suggests that the company is in an expansion phase.

The company's financial performance shows a trend of steady revenue growth and improving profitability. However, the increase in borrowings has led to a high debt-to-equity ratio of 1.94, which investors should consider. The substantial increase in Net Worth indicates a strengthening financial position. Investors should evaluate these financial trends along with the company's market position and future growth prospects when considering the IPO.