AMIC Forging IPO (BSE SME) Overview

AMIC Forging IPO plans to raise 34.80 crores. The issue is entirely a fresh issue of 27.62 lakh shares. AMIC Forging is a Kolkata based manufacturer in forging industry and is engaged in manufacturing of forged Components catering to various industries

IPO opensNov 29, 2023
IPO ClosesDec 01, 2023
IPO Size (Rs.)₹34.80 Cr
IPO Size (shares)2,762,000 shares
BreakupFresh issue only
Face Value:₹ 10
IPO Price in Rs :₹121 to ₹126
Minimum Lot1000 Shares
Listing AtBSE SME
QIB (includes anchor, Market Maker)~50 %
NII Quota~15%
Retail Quota~35%
 Lead ManagerGretex Corporate Services Limited
RegistrarBigshare Services
Market makerGretex Share Broking Ltd., Rainbow Securities

About AMIC Forging;

  • Company was originally incorporated on June 19, 2007 as a private limited company in the name of “Kali Mata Forging Private Limited” at Kolkata.
  • Company is a manufacturer in forging industry and is engaged in manufacturing of forged Components catering to various industries. They manufacture precision machined components as per customer specifications and International Standard catering to the requirements of various industry such as Heavy Engineering, Steel Industry, Oil & Gas, Petrochemicals, Chemicals, Refineries, Thermal Power, Nuclear Power, Hydro Power, Cement Industry, Sugar and other related industries.
  • Company has its well established design center with latest 3D software and highly trained technicians.
  • Its manufacturing facilities has a forging unit with a 6 M/ton capacity Electro Hydraulic Hammer along with 1 M/ton capacity Pneumatic Hammer, each hammer run with support of Manipulator with 3 Overhead Cranes, Job Cranes, 3 oil fired furnace (Temperature controlled) with all necessary accessories. Also they have a Heat Treatment Plant which has oil bogie hearth automatically controlled furnace with four-point recording arrangement & temperature graph indicator/recorder with water and oil quenching arrangement. Apart from above they have a machine shop which contains many machines required for manufacturing process.
  • Some of their common running components are Rounds, Shafts, Blanks and complete finished engineering, spare parts e.g. Gear coupling, Hub, Round, Flange, other all kinds of engineering spares, Steel Forging (machined and un machined) and Engineering component as per drawing and specification..

Financials: AMIC Forging IPO

Particulars / Rs. In Lacs2023 (03) 202320222021
Total Income2,979.3211,683.017,138.822,643.37
Profit Before Tax490.311,315.12123.9877.92
Profit after Tax359.69980.0186.5956.27
Share Capital85.8585.8571.0771.07
Reserves and surplus2,252.581,897.90696.21609.62
Net Worth2,338.431,983.75767.28680.69
Basic & Diluted EPS (₹)4.6612.831.140.75
Return on Net worth (%)15.3949.411.298.27
Net Asset Value Per Share (₹)30.2725.9810.129.09
Total Borrowings287.37385.171,071.32436.5
Post issue Share Capital1,049   
IPO price126.0   
EPS Fy239.3   
PE Fy2313.5   
EPS Fy24 (annualized)13.7   
PE Fy24  (annualized)9.2   
Market cap in Lacs13,217.4   
Market Cap/sales13.5   

Anchor: AMIC Forging IPO

AMIC Forging IPO: Salient Points

  • It has focus on domestic market.
  • From the net proceeds from the IPO Rs. 22.35 cr. for capex will go on new manufacturing unit, Rs. 7.50 cr. for working capital, and the rest for general corporate purposes.
  • AMIC Forging meets requirements of various industry such as Heavy Engineering, Steel Industry, Oil & Gas, Petrochemicals, Chemicals, Refineries, Thermal Power, Nuclear Power, Hydro Power, Cement Industry, Sugar etc. and thus its product diversity lends stability of operations and helps the company to maintain an edge over competition.
  • Company is planning to expand via backward integration with starting the manufacturing of Steel Melting & Ingot Casting. This backward integration would increase its product base and also increase its output due to easily availability of raw material.
  • It is planning to pursue forward integration to change the grain size, refine its magnetic and electrical properties to increase the resistance against corrosion as well as against wear and tear. For that, they propose to set up state of art heat treatment plant which is capable of normalizing, annealing volume hardening and flame hardening, etc.
  • Key Performance Indicators of Company:
Key Financial PerformanceFor the period ended on June 30, 2023For the financial year ended on March 31, 2023For the financial year ended on March 31, 2022For the financial year ended on March 31, 2021
EBITDA Margin16.78%11.71%3.08%5.71%
PAT Margin12.17%8.46%1.22%2.13%
RoE %16.64%71.25%11.96%9.85%
RoCE% 17.86%55.78%10.31%10.05%
  • Peers:
CompanyFVCMP (₹)Revenue (cr)Net Profit (₹ cr)NPMPERONW (%)Mcap (cr)Macp/sales
Amic Forging101261179.80018.4%1049.41321.1
Maiden Forgings10127221104.5%18.723.591800.8
Ramkrishna Forgings27603,1932487.8%47.418.7713,7434.3
  • Some of company’s major clients iinclude Tata Steel, SAIL, JSPL, Precision Transmission Chain etc.
  • It has won award from Tata Steel for quality of its products.
  • Ukraine crisis has helped the company as imports from this region have come down.
  • AMIC Forging IPO is coming at a PE ratio of 13.5x(fy23 earnings) and 9.2x (fy24 annualized earnings).
  • I intend to apply in AMIC Forging IPO. Company has been increasing its margins and is going for backward as well as forward integration.
  • GMP as reported on social media has been around Rs. 30.
  • SME IPO are more risky than mainboard IPOs. This post is not a suggestion to apply for this IPO.
  • Gretex Corporate Services Limited is the Lead Manager. Past issues handled by them include Kalyani Cast Tech Ltd, Transteel Seating Technologies Limited, Shelter Pharma Limited, Comrade Appliances Limited, Innokaiz India Limited Retina Paints Limited, Sudarshan Pharma Industries, ResGen Limited, Reetech International Cargo and Courier Ltd, Steelman Telecom Limited, Shantidoot Infra Services.
  • Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational/ exploratory purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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