Forge Auto International is an engineering company specializing in the forging and manufacturing of complex and safety-critical forged and precision machined components. Their product lineup includes items such as big rings, small rings, big ball studs, gear blanks with broach, stub axle assemblies, and flange yoke 325 HS. The company serves various sectors, including the automobile industry (automobiles, tractors, railways) and non-auto sectors (agricultural parts, hydraulic parts, striking tools).

The Forge Auto IPO is a Book Built Issue amounting to ₹31.10 Crores, entirely comprising a Fresh Issue of 28.80 Lakh Shares. The subscription period for the Forge Auto IPO opens on September 26, 2024, and will close on September 30, 2024. Allotment is expected to be finalized on or about Tuesday, October 01, 2024, with shares tentatively listed on the NSE SME on or about Friday, October 04, 2024.

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

HEM SECURITIES LIMITED is the book-running lead manager, while Bigshare Services Private Limited serves as the registrar for the issue. Hem Finlease Private Limited is the sole Market Maker for the Forge Auto IPO.

Regarding the Grey Market Premium (GMP), it is currently expected to be in the range of ₹0, based on the company’s financial performance. It is important to note that the GMP does not facilitate real trading, meaning no genuine price discovery can occur before the shares are officially listed on the stock exchange. The GMP reflects demand and supply in an unregulated market and is shared for educational purposes only.

As of 04:56 PM on September 27, 2024, the live subscription status indicates that the Forge Auto International Limited IPO has been subscribed 10.44 times on its second day. Investors can check the live subscription status at the NSE for the latest updates.

The allotment date for the Forge Auto IPO is set for October 01, 2024. Investors can check their allotment status online by navigating to the IPO allotment status page, selecting Forge Auto International Limited IPO from the dropdown list, and entering their application number, PAN, or DP Client ID.

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

₹1900.00 Lakhs will be allocated to meet working capital requirements.

₹500.00 Lakhs will be used for the repayment of certain borrowings availed by the company, in part or full.

General corporate purposes.

Forge Auto International IPO Review The company’s growth is backed by a strong management team. Promoters Parmod Gupta and Rajan Mittal have played a vital role in the company's strategic direction and overall performance. Pramod Gupta has around 48 years of experience in the forging business, driving investment and growth strategy alongside managing day-to-day operations. Rajan Mittal brings 32 years of expertise in business development and financial management in the forging industry.

Financially, the revenue for Fiscal 2024 was ₹18,157.30 Lakhs, up from ₹17,764.43 Lakhs in Fiscal 2023 and ₹13,400.28 Lakhs in Fiscal 2022. The EBITDA figures are also positive, with ₹1,371.77 Lakhs in Fiscal 2024, compared to ₹1,128.55 Lakhs in Fiscal 2023 and ₹718.42 Lakhs in Fiscal 2022. The Profit After Tax was ₹668.88 Lakhs in Fiscal 2024, illustrating the company’s robust profitability.

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, significantly lower than the industry P/E ratio of 48.97x. The ROCE for FY24 is 17.60%, and the RoAE is 35.76%, suggesting that the IPO is fairly priced in the current market context.

Despite the positive financial performance, the GMP indicates potential listing gains of 0%. Given the company's financial metrics and current valuation, we recommend that investors avoid the Forge Auto International Limited IPO for quick listing gains or long-term investment purposes.

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