Forge Auto International IPO Listing Details

Forge Auto International Limited, an engineering company specializing in forging and manufacturing components for the automotive and non-automotive sectors, made a modest debut on the Indian stock market on Friday, 4th October 2024, with its shares listing at a small premium to the issue price on the National Stock Exchange (NSE) SME platform.

Listing Details

• Listing Price: Forge Auto International shares were listed at ₹113 per share on the NSE SME platform, marking a positive start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a moderate premium over the IPO issue price. Forge Auto International had set its IPO price band from ₹102 to ₹108 per share, with the final issue price being fixed at the upper end of ₹108.
• Percentage Change: The listing price of ₹113 on the NSE SME translates to a premium of 4.63% over the issue price of ₹108.

First-Day Trading Performance

• Opening vs. Latest Price: Following its modest opening, Forge Auto International's share price experienced some volatility. By 10:28 AM, the stock was trading at ₹107.35, down 5% from its opening price and 0.60% below the issue price, hitting the lower circuit for the day.
• Market Capitalisation: As of 10:28 AM, the company's market capitalisation stood at ₹117.23 crore.
• Trading Volume: The traded volume was 8.45 lakh shares with a traded value of ₹9.46 crore, indicating moderate investor interest on the first day of listing.

Market Sentiment and Analysis

• Market Reaction: The market initially reacted positively to Forge Auto International's listing, but the stock experienced selling pressure during early trading.
• Subscription Rate: The IPO was oversubscribed by 49.28 times, with retail investors leading at 61.95 times subscription, followed by NIIs at 58.55 times, and QIBs at 20.13 times.
• Grey Market Premium: Prior to listing, shares were trading at a premium of 13% in the grey market, which was not realized at listing.

Growth Drivers and Challenges

Expected drivers of future performance:

• Established relationships with domestic and global OEMs
• Diverse product portfolio serving both automotive and non-automotive sectors
• Manufacturing facility with significant installed capacity
• Quality certifications including ISO 9001:2015 and IATF 16949:2016

Potential challenges:

• Highly competitive automotive components manufacturing sector
• Potential volatility in raw material prices
• Dependence on automotive industry performance

Utilisation of IPO Proceeds

Forge Auto International plans to use the funds for:

• Meeting working capital requirements
• Repayment of specific borrowings
• General corporate purposes

Financial Performance

The company has demonstrated exceptional financial growth:

• Revenue increased by 2% to ₹18,157.3 lakh in FY2024 from ₹17,764.43 lakh in FY2023
• Profit After Tax (PAT) rose by 35% to ₹668.88 lakh in FY2024 from ₹496.29 lakh in FY2023

As Forge Auto International begins its journey as a listed entity, market participants will closely monitor its ability to leverage its manufacturing capabilities and customer relationships to drive future growth and shareholder value. The muted listing and subsequent price decline suggest cautious market sentiment towards the company's prospects in the competitive automotive and industrial components manufacturing sector.