Forge Auto International is a prominent engineering company specializing in the forging and manufacturing of complex and safety-critical components, including big rings, small rings, big ball studs, gear blanks with broaches, stub axle assemblies, and flange yokes. The company caters to a diverse range of sectors, including the automotive industry (encompassing automobiles, tractors, and railways) as well as non-auto sectors such as agriculture parts, hydraulic components, and striking tools.

The Forge Auto IPO is a Book Built Issue amounting to ₹31.10 Crores, consisting entirely of a Fresh Issue of 28.80 Lakh Shares. The subscription period for the IPO is from September 26, 2024, to September 30, 2024. Allotment results are expected to be finalized on or about October 1, 2024, with a tentative listing date set for October 4, 2024, on the NSE SME.

Share Price and Lot Size

The share price band for the Forge Auto IPO is set between ₹102 and ₹108 per share, with a minimum lot size of 1,200 shares. This implies a minimum investment of ₹1,29,600 for retail investors, while High-Net-Worth Individuals (HNIs) are required to invest in at least 2 lots (2,400 shares), amounting to ₹2,59,200. The IPO is being managed by HEM SECURITIES LIMITED as the book-running lead manager, with Bigshare Services Private Limited as the registrar for the issue, and Hem Finlease Private Limited serving as the sole market maker.

Grey Market Premium (GMP)

As of the latest reports, the Grey Market Premium (GMP) for Forge Auto International Limited IPO is anticipated to be around ₹0. This indicates a lack of significant trading activity in the grey market, suggesting limited demand based on the company's current financial performance. It’s important to remember that grey market activity is not a reliable mechanism for price discovery and is included solely for informational purposes.

Live Subscription Status

As of 6:56 PM on September 30, 2024, the subscription status for the Forge Auto International Limited IPO shows that it has been subscribed 45.87 times on its third day of the subscription period, demonstrating strong investor interest. Prospective investors can check the live subscription status on the NSE.

Anchor Investors Report

Forge Auto International has successfully raised ₹8.83 Crore from Anchor Investors at a price of ₹108 per share. The company allocated 8,19,400 equity shares to these investors, reflecting confidence from institutional stakeholders. It's important to note that shares allotted to anchor investors are drawn from the Qualified Institutional Buyers (QIBs) reservation portion.

Allotment Date and How to Check

The allotment date for the Forge Auto IPO is scheduled for October 1, 2024. Investors can check their allotment status by visiting the registrar's website and following these steps:

Navigate to the IPO allotment status page.

Select Forge Auto International Limited IPO from the dropdown list of IPOs.

Enter your application number, PAN, or DP Client ID.

Submit the details to view your allotment status.

Objectives of the Forge Auto IPO

The proceeds from the fresh issue will be utilized for the following objectives:

₹1,900 Lakhs to meet working capital requirements.

₹500 Lakhs for the repayment of certain borrowings availed by the company, either in part or full.

General corporate purposes.

Financial Performance Overview

Forge Auto International has shown steady growth in its financial performance over the last three fiscal years:

Fiscal 2024: Revenue of ₹18,157.30 Lakhs, EBITDA of ₹1,371.77 Lakhs, and Profit after Tax of ₹668.88 Lakhs.

Fiscal 2023: Revenue of ₹17,764.43 Lakhs, EBITDA of ₹1,128.55 Lakhs, and Profit after Tax of ₹496.29 Lakhs.

Fiscal 2022: Revenue of ₹13,400.28 Lakhs, EBITDA of ₹718.42 Lakhs, and Profit after Tax of ₹264.34 Lakhs.

These figures reflect a positive growth trajectory, indicating the company's ability to enhance revenue and profitability.

Valuation Metrics

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 stands at 10.57x, while the post-issue P/E ratio is 17.64x, compared to the industry P/E ratio of 48.97x. Additionally, the company's Return on Capital Employed (ROCE) for FY24 is 17.60%, and the Return on Equity (RoAE) is 35.76%. These metrics suggest that the IPO is fairly priced relative to its peers.

Investment Recommendation

Given the Grey Market Premium (GMP) indicating minimal potential for listing gains and the current financial performance metrics, we recommend investors avoid the Forge Auto International Limited IPO for both short-term listing gains and long-term investment purposes. While the financial growth is commendable, the IPO's pricing and market conditions do not present a compelling case for investment at this time.

For more insights into the evolving financial landscape and updates on economic developments, explore our articles on Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance Saathi and Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News - Finance Saathi.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & Finance Saathi Telegram Channel for Regular Share Market, News & IPO Updates.

Start your Stock Market Journey and Apply in IPO by Opening a Free Demat Account in Choice Broking FinX.

Forge Auto International Limited's journey in the forging sector illustrates a company poised for growth. However, investors should carefully consider the current market sentiment and financial indicators before making investment decisions.