The Forge Auto International Limited IPO has generated considerable interest among investors with its announcement of a Book Built Issue amounting to ₹31.10 Crores. This issue comprises a fresh allocation of 28.80 lakh shares. The subscription period for this IPO commenced on September 26, 2024, and is set to conclude on September 30, 2024. The allotment of shares is expected to be finalized on October 1, 2024, with shares anticipated to be listed on the NSE SME by October 4, 2024.

The share price band for the Forge Auto IPO is established at ₹102 to ₹108 per equity share, with a minimum lot size of 1,200 shares. This translates to a minimum investment of ₹1,29,600 for retail investors and ₹2,59,200 for High-Net-Worth Individuals (HNIs), who must subscribe to a minimum of 2 lots (2,400 shares). The lead manager for this IPO is HEM SECURITIES LIMITED, while Bigshare Services Private Limited acts as the registrar for the issue.

As of September 30, 2024, the Grey Market Premium (GMP) for Forge Auto International Limited is anticipated to be around ₹0, reflecting the company's recent financial performance. Notably, the Grey Market Premium is not a reliable indicator of the actual listing price, as it largely relies on demand and supply dynamics in the unregulated market.

Subscription Status:

Real-time updates on the Forge Auto International Limited IPO live subscription status indicate a subscription rate of 45.87 times on the third day of the subscription period. Investors can check the current status via the NSE for up-to-the-minute information on the subscription.

Anchor Investors Report:

In a strategic move, Forge Auto International has successfully raised ₹8.83 Crore from Anchor Investors at a price of ₹108 per share. The allocation involved 8,19,400 equity shares designated for these investors. It is essential to note that shares allotted to anchor investors are typically drawn from the Qualified Institutional Buyers (QIBs) reservation portion.

Allotment Process:

The allotment of shares for the Forge Auto IPO will occur on October 1, 2024, and will be accessible on the registrar's website from that date. Investors can check their allotment status by following these steps:

Visit the IPO allotment status page.

Select Forge Auto International Limited IPO from the dropdown menu.

Enter the required information, such as the application number, PAN, or DP Client ID, and submit to view the allotment status.

Utilization of IPO Proceeds:

The funds raised from the fresh issue will be allocated towards various objectives, including:

₹1900.00 Lakhs designated for working capital requirements.

₹500.00 Lakhs set aside for repayment of certain borrowings made by the company, either partially or in full.

Additional funds will be utilized for general corporate purposes.

Financial Overview:

Forge Auto International is engaged in the engineering sector, specializing in the forging and manufacturing of complex, safety-critical components such as big rings, small rings, ball studs, gear blanks, stub axle assemblies, and flange yokes. The company serves diverse sectors, including the automotive industry (automobiles, tractors, railways) and non-automotive sectors (agriculture parts, hydraulic parts, striking tools).

Promoters Parmod Gupta and Rajan Mittal have significantly contributed to the company's growth. Parmod Gupta boasts nearly 48 years of experience in the forging business, focusing on new investments and growth strategies, while Rajan Mittal brings 32 years of expertise in business development and financial management within the industry.

From a financial standpoint, the company has demonstrated steady growth, with revenues reported for Fiscal Years 2024, 2023, and 2022 being ₹18,157.30 Lakhs, ₹17,764.43 Lakhs, and ₹13,400.28 Lakhs, respectively. The EBITDA figures for the same periods were ₹1,371.77 Lakhs, ₹1,128.55 Lakhs, and ₹718.42 Lakhs. Furthermore, the Profit After Tax figures indicate an upward trend at ₹668.88 Lakhs, ₹496.29 Lakhs, and ₹264.34 Lakhs over these fiscal years.

The pre-issue EPS stands at ₹10.21, while the post-issue EPS is projected to be ₹6.12. The pre-issue P/E ratio is recorded at 10.57x, with a post-issue P/E ratio of 17.64x, compared to the industry average of 48.97x. Notably, the company’s Return on Capital Employed (ROCE) for FY24 is 17.60%, and the Return on Equity (RoAE) is 35.76%, suggesting a well-valued IPO.

Investment Recommendation:

Given the Grey Market Premium (GMP) showing potential listing gains of 0%, it is advisable for investors to avoid the Forge Auto International Limited IPO for both listing gains and long-term investment purposes. While the company's financial performance is commendable, the lack of a strong market demand reflected in the GMP raises concerns regarding its attractiveness for immediate profit.

For more insights and updates on investment opportunities, explore our resources at 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.