Munish Forge Makes Modest Debut with 14.84% Premium, Lists at ₹110.25 Against Moderate Subscription

Munish Forge Limited, the manufacturing company producing flanges, scaffolding, auto parts, tank tracks, bomb shells, and steel accessories serving Indian Army, defence, oil and gas, automobile, and construction sectors, made a modest debut on NSE SME on October 8, 2025. After closing its IPO bidding between September 30-October 3, 2025, the company commenced trading with a 9.38% premium opening at ₹105 and rose to ₹110.25 with gains of 14.84%.

Munish Forge Listing Details

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Munish Forge Limited launched its IPO at ₹96 per share with a minimum investment of 2,400 shares costing ₹2,30,400. The IPO received moderate response with a subscription of 3.53 times - individual investors at 2.66 times, NII at 4.88 times, and QIB at 4.05 times.

First-Day Trading Performance Outlook

Listing Price: Munish Forge share price opened at ₹105 representing a premium of 9.38% from the issue price of ₹96, and rose to ₹110.25, delivering modest gains of 14.84% for investors reflecting positive market sentiment towards defence manufacturing sector.

Growth Drivers and Challenges

Growth Drivers:

• Defence and Strategic Clientele: Manufacturing critical components for Indian Army including Battle Tank Track Chains and Bomb Shells with rigorous testing at NABL-certified labs, serving prestigious OEMs across Europe, North America, Middle East, and India.
• Integrated Manufacturing Capabilities: Complete in-house operations from die design, forging, machining, heat treatment, plating to packaging with CNC machines, robotic welders, CAD/CAM systems, and modern techniques including induction furnaces and solar power.
• Strong Certifications: ISO 9001:2015, ISO 14001-2015, IATF-16949-2016, and PED certifications ensuring quality standards, workforce of 754 employees, and compliance with international standards.

Challenges:

• Extraordinary FY25 Performance Concerns: Exceptional PAT growth of 226% to ₹14.30 crore raising eyebrows about sustainability, as such dramatic improvement from ₹4.39 crore in FY24 requires validation through consistent future performance.
• Full Valuation Metrics: Post-issue P/E of 16.16x appearing fully priced, elevated debt-to-equity ratio of 0.89 indicating substantial financial leverage requiring careful management in capital-intensive manufacturing operations.
• Competitive Market Landscape: Operating in highly competitive and fragmented forged and cast components manufacturing segment requiring continuous innovation, quality maintenance, and cost competitiveness against established players.

Utilisation of IPO Proceeds

• Capacity Expansion: ₹7.19 crore for capital expenditure towards civil construction and purchase of additional plant and machinery enhancing manufacturing capabilities and production capacity.
• Debt Reduction and Working Capital: ₹10.08 crore for debt repayment improving financial leverage from 0.89x debt-to-equity ratio, and substantial ₹110.35 crore for working capital requirements supporting operational scale-up.
• General Corporate Purposes: Supporting business operations and strategic initiatives for sustained growth in defence and industrial components manufacturing.

Financial Performance of Munish Forge

• Revenue: ₹178.63 crore for FY25, showing steady growth of 11% from ₹161.58 crore in FY24, reflecting consistent market demand for forged and cast components.
• Net Profit: ₹14.30 crore in FY25, representing extraordinary growth of 226% from ₹4.39 crore in FY24, though exceptional improvement raises sustainability concerns requiring validation through consistent future performance.
• Financial Metrics: Healthy ROE of 21.22%, moderate ROCE of 16.44%, elevated debt-to-equity ratio of 0.89, healthy PAT margin of 8.15%, moderate EBITDA margin of 13.89%, reasonable price-to-book value of 2.34, and estimated market capitalisation of ₹265.37 crore.