Emmforce Autotech Limited IPO, GMP, Review

Emmforce Autotech Limited IPO Review: Emmforce Autotech Limited’s IPO comprises of a fresh offering of 54,99,600 lakh shares valued at INR 53.90 crore. The corporation intends to invest in subsidiaries, meet working capital requirements, and achieve general corporate objectives.

Emmforce Autotech Limited IPO – Important Dates

Emmforce Autotech Limited IPO Date	April 23, 2024 to April 25, 2024
Emmforce Autotech Limited IPO Listing Date	April 30, 2024
Emmforce Autotech Limited IPO Price	INR 93-98 per share
Emmforce Autotech Limited IPO Lot Size	1200 Shares
Emmforce Autotech Limited IPO Total Issue Size	INR 53.90 crores
Emmforce Autotech Limited IPO Basis of Allotment	April 26, 2024
Emmforce Autotech Limited IPO Initiation of Refunds	April 29, 2024
Emmforce Autotech Limited IPO Credit of Shares to Demat	April 29, 2024
Emmforce Autotech Limited IPO Issue Type	Book Built Issue IPO
Emmforce Autotech Limited IPO Listing At	BSE SME

Emmforce Autotech Ltd IPO – Company Profile

Emmforce Autotech Limited manufactures specialist automobile powertrain parts, primarily for four-wheel drive and performance racing vehicles. Renowned for quality, cost-effective solutions, and innovative designs, with a particular emphasis on exports.

It has a large inventory of tooling and fixtures, as well as an unwavering commitment to engineering, allowing for the rapid development of novel products. This boosts performance, ensures on-time delivery, and increases profitability through competitive pricing.

It provides full-cycle engineering solutions, including market analysis, customized strategy, product design, prototyping, testing, and production. Our in-house skills include forging, machining, fabrication, heat treatment, logistics, quality assurance, design, and validation, providing complete client satisfaction.

Emmforce Autotech Limited IPO Financials

Emmforce Autotech Limited Technologies’ financial analysis shows varied results. Revenue increased initially but then fell, resulting in the current year’s shortfall. Profitability and equity increased, but diluted EPS and RoNW declined, indicating varying firm performance.

Revenue Trend: The revenue dropped from ₹6,906.29 lakhs in March 2022 to ₹4,569.08 lakhs in March 2023. The income for the current year’s seven-month period ending October 2023 is INR 519.24 lakhs, which falls short of the previous year’s benchmark.
Equity and Liabilities: Equity has increased over time, indicating prospective growth and expansion.
Profitability: The profit after tax (PAT) has declined drastically from ₹732.58 lakhs in March 2022 to ₹43.72 lakhs in October 2023. Investors may be concerned about the fall in profitability.
Earnings per Share (EPS): The diluted EPS decreased from ₹4.88 in March 2022 to ₹0.29 in October 2023, indicating fewer earnings per share for investors.
Return on Net Worth (RoNW): The RoNW has fallen from 34.41% to 2.83%, which indicates a decline in the company’s capacity to create returns on shareholder equity.
Financial Position: Total assets have increased, indicating future business growth.

Emmforce Autotech Limited IPO Fundamental Analysis

Particular	As of 31 March 2022	As of 31 March 2023	As of 31 October 2023
Revenue (₹ in lakhs)	6,906.29	4,569.08	519.24
Equity (₹ in lakhs)	2,129.09	2,344.95	1,543.72
Expenses (₹ in lakhs)	6,017.39	4,197.62	459.13
Profit and Loss After Tax (₹ in lakhs)	732.58	438.85	43.72
Diluted EPS only (₹)	4.88	2.93	0.29
Return on Net Worth (%)	34.41	18.71	2.83
NAV per Equity Share (₹)	14.19	15.63	10.29
Total Assets (in lakhs)	5,257.36	4,895.40	5,597.13
Total Liabilities (in lakhs)	3,128.27	2,550.45	4,053.4

Emmforce Autotech Limited IPO Peer Comparison

Emmforce Autotech Limited’s standalone EPS is lower than Divgi Torqtransfer Systems Ltd, demonstrating a notable increase in its EPS from the previous period.

Company	Type of Financial	Face Value (₹)	EPS (₹)	PE	RoNW (%)	NAV per Equity Share (Basic) (₹)
Emmforce Autotech Limited	Standalone	10	2.93	NA	18.71	15.63
Divgi Torqtransfer Systems Ltd	Standalone	10	18.45	44.31	9.28	360.53

Emmforce Autotech Limited IPO Objective

The primary goal of Emmforce Autotech Limited is to invest in subsidiary firms and meet working capital needs.

Investment in Subsidiary Companies: The company plans to invest INR 1,000 lakhs in Emmforce Mobility Solutions Pvt. Ltd. (EMSPL) for working capital and term loan margin. EMSPL will use the funding to establish a facility in Himachal Pradesh.
To Meet Working Capital Requirements: The auto components manufacturer intends to use INR 2700 lakhs of the issue’s net proceeds for operating capital, with the remaining sourced through borrowings to facilitate business expansion.
General Corporate Purposes: The organization will distribute funds to broad corporate aims, such as operating needs, project development, and improving business development and marketing capacities for growth.

Emmforce Autotech Limited IPO Risks And Challenges

Emmforce Autotech Limited’s risk factors include a high reliance on the automobile industry, regulatory compliance issues, and the requirement for agile adaptation to technological and regulatory shifts in order to remain competitive.

Their auto-components business is heavily dependant on the performance of the automobile industry. It is vulnerable to market swings, government regulations, economic conditions, and demographic trends, all of which can have an impact on company, operations, and financial stability.
Their operations are subject to several rules and regulations, which require the acquisition of licenses and permissions. Delays or non-receipt of clearances can result in cost overruns, operational limitations, and potential penalties in increasingly strict regulatory environments.
Their competitiveness is based on their ability to anticipate and adapt to technical and regulatory changes, as well as develop new items on time. Failure to do so may result in obsolescence, affecting business, finances, and future prospects.

Emmforce Autotech Limited IPO – Industry & Market Potential

India’s growing economy, fueled by rising wages and infrastructure investment, is driving expansion in the vehicle industry, notably two-wheelers. The sector contributes significantly to GDP, employment, and exports, and is expected to expand greatly by 2026.

In 2022-23, India’s auto components business generated Rs. 5.6 lakh crore (US$69.7 billion) in sales, primarily from local OEM supplies (~66%), exports (~22.3%), and aftermarket growth (15%). Exports are projected to reach $30 billion by 2026.

The transition to electric and hybrid vehicles presents opportunities for auto component producers. India’s incentives and infrastructure investments help to assist this shift, with the goal of achieving significant growth and expanding global automobile commerce.

Emmforce Autotech Limited IPO Allotment Structure

According to SEBI regulations, Emmforce Autotech Limited would allocate 50% to qualified institutional buyers (QIB), 35% to non-institutional investors (NII), and 15% to retail individual investors (RII).

● Qualified Institutional Buyers (QIB): According to SEBI norms, 50% of the shares offered in the IPO would be reserved for Qualified Institutional Buyers. These include banks, mutual funds, and insurance businesses.

● Non-Institutional Investors (NII): 35% of the shares will be reserved for non-institutional investors. These often include corporate entities or individuals who invest more than Rs.2 lakhs.

● Retail Individual Investors (RII): The remaining 15% of the shares will be allocated to retail individual investors. These individual investors apply for shares worth less than Rs. 2 lakhs.

Emmforce Autotech Limited IPO GMP

IPO OPEN TO CLOSE DATE	IPO PRICE	LATEST GMP	ESTIMATED LISTING GAIN
23 April to 25 April 2024	98	35	133 (35.71%)

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Note: The information associated with the IPO is for educational purposes only. Consider with your financial advisor before investing in an IPO.