Forge Auto International IPO Review

Forge Auto International is an engineering company engaged into forging and manufacturing of 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, flange yoke 325 HS, catering to different industry sectors like auto industry including automobiles, tractors, railways etc. and non-auto sectors like agriculture parts, hydraulic parts, striking tools etc.

The Promoters and senior management have been instrumental in the growth of the business. The Promoter Parmod Gupta and Rajan Mittal have played a vital role in the growth of the Company and continues to provide strategic guidance and oversees overall performance of the Company. Pramod Gupta has the experience of around 48 years in running the forging business and drives new investment and growth strategy besides managing day to day operations of the Company. Rajan Mittal has around 32 years of experience in the field of business development and financial management in the forging industry.

Financially, Revenue in Fiscal 2024, Fiscal 2023 and Fiscal 2022 was ₹18,157.30 Lakhs, ₹17,764.43 Lakhs and ₹13,400.28 Lakhs, respectively. The EBITDA for the Fiscals 2024, 2023 and 2022 were ₹1,371.77 Lakhs, ₹1,128.55 Lakhs and ₹718.42 Lakhs respectively. The Profit after Tax for the Fiscals 2024, 2023 and 2022 were ₹668.88 Lakhs, ₹496.29 Lakhs and ₹264.34 Lakhs respectively. This indicates steady growth in financial performance.

For the Forge Auto International IPO, the company is issuing shares at a pre-issue EPS of ₹10.21 and a post-issue EPS of ₹6.12. The pre-issue P/E ratio is 10.57x, while the post-issue P/E ratio is 17.64x against the Industry P/E ratio is 48.97x. The company's ROCE for FY24 is 17.60% and RoAE for FY24 is 35.76%. These metrics suggest that the IPO is fairly priced.

The Grey Market Premium (GMP) of Forge Auto International showing potential listing gains of 0%. Given the company's financial performance and the valuation of the IPO, we recommend Investors to Avoid to the Forge Auto International Limited IPO for Listing gain or long term investment purposes.

Disclaimer: The information provided in this IPO review is for educational and informational purposes only and should not be construed as financial advice or an offer to buy or sell securities. The review must not be used as a singular basis of any investment decision. The views herein are of a general nature and do not consider the risk appetite or the particular circumstances of an individual investor; readers are requested to take professional advice before investing. Nothing in this document should be construed as investment advice. The content is based on publicly available information and market perceptions as of the date of publication and is subject to change. Neither the author nor the website is responsible for any losses or damages arising from the use of this information. 

About the Author
CA Abhay Kumar (Also known as CA Abhay Varn) is a qualified Chartered Accountant by profession and cleared CA at age 21. He is a SEBI Registered Research Analyst with Registration Number - INH300008465. He Possesses 8+ years of experience in the Stock Market Field and has also worked in Big CA firms during the training period. He is good at Technical analysis and Fundamental Analysis and uses both Technical and Fundamental analysis along with five other important factors that affect the movement of the Market namely Global Market Analysis, Upcoming Event Analysis, Institutional Money Analysis, Derivative Data Analysis, and Emotions and Sentiment of Traders and Investors in his Framework called - Technical Fundamental GUIDE to find the winning Trades.
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