Forge Auto International is an engineering company specializing in the forging and manufacturing of complex and safety-critical components. Their product range includes big rings, small rings, big ball studs, gear blanks with broach, stub axle assemblies, and flange yoke 325 HS. They cater to diverse sectors, including the automotive industry (covering automobiles, tractors, and railways) and non-automotive sectors such as agriculture parts, hydraulic parts, and striking tools.

The upcoming 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 opens on September 26, 2024, and closes on September 30, 2024. The allotment is expected to be finalized on or about October 01, 2024, with shares scheduled to be listed on the NSE SME around October 04, 2024.

The share price band for the Forge Auto IPO is set between ₹102 and ₹108 per equity share, with a minimum lot size of 1,200 shares. Retail investors must invest a minimum of ₹1,29,600, while High-Net-Worth Individuals (HNIs) are required to invest at least ₹2,59,200 for 2,400 shares.

HEM SECURITIES LIMITED is the book-running lead manager for this IPO, while Bigshare Services Private Limited serves as the registrar. Hem Finlease Private Limited is designated as the sole market maker.

Live Subscription Status

As of 06:56 PM on September 30, 2024, the live subscription status for the Forge Auto IPO shows a remarkable subscription of 45.87 times on its third day. Investors can monitor real-time updates on the NSE website.

Anchor Investors Report

Forge Auto International has raised ₹8.83 Crore from anchor investors at a price of ₹108 per share, allocating 8,19,400 equity shares. It is important to note that shares allotted to anchor investors are taken from the Qualified Institutional Buyers (QIBs) reservation portion.

Allotment Date and Procedure

The allotment date for the Forge Auto IPO is set for October 01, 2024. Investors can check their allotment status using these steps:

Navigate to the IPO allotment status page.

Select Forge Auto International Limited IPO from the dropdown list.

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

Submit the details to view your allotment status.

Objectives of the IPO

The proceeds from the Fresh Issue will be utilized for:

₹1,900.00 Lakhs for meeting working capital requirements.

₹500.00 Lakhs for repaying certain borrowings availed by the company, either in part or full.

General corporate purposes.

Financial Performance Overview

Forge Auto International has demonstrated solid financial growth in recent years. The revenue figures for Fiscal 2024, 2023, and 2022 were ₹18,157.30 Lakhs, ₹17,764.43 Lakhs, and ₹13,400.28 Lakhs, respectively. The EBITDA for the same fiscal years were ₹1,371.77 Lakhs, ₹1,128.55 Lakhs, and ₹718.42 Lakhs. Moreover, the Profit After Tax figures were ₹668.88 Lakhs, ₹496.29 Lakhs, and ₹264.34 Lakhs, reflecting a steady upward trend.

For the Forge Auto International IPO, the company is issuing shares with a pre-issue EPS of ₹10.21 and a post-issue EPS of ₹6.12. The pre-issue P/E ratio is 10.57x, and the post-issue P/E ratio stands at 17.64x, compared to an industry average of 48.97x. The company’s Return on Capital Employed (ROCE) for FY24 is 17.60%, and the Return on Equity (RoAE) is 35.76%, indicating that the IPO is fairly priced.

Investment Recommendation

The Grey Market Premium (GMP) for Forge Auto International is currently showing potential listing gains of 0%. Considering the financial performance and valuation metrics, we recommend that investors avoid the Forge Auto International Limited IPO for both listing gains and long-term investment purposes.

In summary, investors should carefully assess their investment strategies and market conditions before considering participation in the Forge Auto IPO. 

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