Panchkula-based Emmforce Autotech, a prominent auto components manufacturer, has officially submitted its Draft Red Herring Prospectus (DRHP) to the BSE SME, marking a significant step towards an Initial Public Offering (IPO). The company, specializing in manufacturing niche automotive drivetrain parts, is set to issue 55 lakh equity shares at a face value of Rs 10.
Beeline Capital Advisors has been selected as the Book Running Lead Manager for the IPO, and Link Intime India Private Limited will serve as the Registrar. The move reflects Emmforce Autotech’s strategic plans for expansion and growth in the competitive auto components sector.
Focus on Niche Drivetrain Parts and Global Exports
Emmforce Autotech, headquartered in Panchkula, stands out as a manufacturer of niche automotive drivetrain parts, catering to a global market. With exports to six continents, including major markets in North America and Asia, the company has established itself as a reliable supplier.
The comprehensive range of drivetrain parts includes Differential Housings, Differential Lockers, 4WD Locking Hubs, Axles, Shafts, Gear Shifters, Yokes, and more. Emmforce operates a state-of-the-art manufacturing plant covering 1,50,000 sq ft in Baddi, Himachal Pradesh.
Strategic Allocation of IPO Proceeds
Emmforce Autotech aims to utilize the funds raised through the IPO strategically. The company plans to invest Rs 10 crore in its recently acquired subsidiary, Emmforce Mobility Solutions Private Limited (EMSPL). This investment will support the establishment of a new manufacturing plant at Jharmajri, Baddi, Himachal Pradesh, focusing on Blades for Rotavators and Steel Forgings for the automotive and engineering industries.
The IPO proceeds will also contribute Rs 27 crore towards meeting Emmforce’s working capital requirements and for general corporate purposes.
Chairman’s Vision for Expansion
Ashok Mehta, Chairman and Managing Director of Emmforce Autotech Limited, expressed the company’s vision for expansion. Mehta highlighted Emmforce Autotech as a one-stop solution for a variety of drivetrain parts, positioning it as a preferred supplier for customers.
The company aims to use the IPO proceeds to expand EMSPL’s manufacturing capabilities, tapping into untapped territories, including Europe, South America, Africa, the Middle East, Asia Pacific, and India. Emmforce Autotech plans to broaden its product line to serve sectors like Agriculture, Off Highway, EV, Railways, and Defence.
Financial Performance and Market Overview
In FY2022-23, Emmforce Autotech recorded a total revenue of Rs 48.75 crore, with a profit after tax (PAT) of Rs 4.38 crore. The company’s financial performance underscores its strong position in the auto components industry.
India’s auto components industry has experienced significant growth, contributing to the country’s economic development. With a market share of 66% from domestic OEM supplies, the industry turnover reached Rs. 5.6 lakh crore (US$ 69.7 billion) in 2022-23.
Emmforce Autotech’s IPO is poised to attract attention from investors and industry enthusiasts, reflecting confidence in the company’s growth trajectory and strategic vision.