Munish Forge 

• Munish Forge is coming out with an initial public offering (IPO) of 77,00,400 equity shares in a price band of Rs 91-96 per equity share.  
• The issue will open on September 30, 2025 and will close on October 3, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 9.10 times of its face value on the lower side and 9.60 times on the higher side.
• Book running lead manager to the issue is Gretex Corporate Services.
• Compliance Officer for the issue is Sukhdeep Kaur.

Profile of the company

The company manufactures components like Flange, Scaffolding, Auto parts, Tank tracks chains, Bomb shells, Fence post and steel accessories as per customer specifications and International Standard catering to the requirements of Indian Army and various industries such as Defence, Oil and Gas, Automobile, Construction and Infrastructure. With over 40 years of legacy in precision engineering, the company has established itself as a trusted supplier in the Defence sector. Starting with a single machine shop, it has grown into a powerhouse, manufacturing critical components for the Indian Army, such as Battle Tank Track Chains and Bomb Shells. Detailed testing both in-house and at NABL-certified labs ensures that its products meet the Defence-level standards. With ongoing projects and approvals from Defence authorities, it contributes significantly to India's Defense capabilities while also serving clients across developed markets like the USA, UK, Canada, and Europe.

As part of the company’s growth strategy, the company is actively expanding into new sector like Railways, where it has recently begun registering for tenders to supply critical forged components. The Indian Railways, being one of the largest and fastest-growing rail networks, offers immense potential for growth through large-scale modernization, electrification, and expansion projects. The railway industry demands precision-engineered parts with exceptional durability, making it a natural extension of its capabilities. By participating in tenders, it aims to secure large-scale contracts that will not only enhance its business portfolio but also establish it as a reliable supplier in this sector too.

Proceed is being used for:

• Capital expenditure towards Civil construction and Capital expenditure towards purchase of additional machinery
• Repayment/pre-payment of certain debt facilities
• Working capital requirements
• General corporate purposes

Industry Overview

The Indian Construction Equipment (CE) industry demonstrated exceptional performance in FY 2023-24, recording a 26% increase in overall sales volume with total equipment sales surpassing projections to reach 135,000 units compared to 107,000 units in FY 2023. This impressive growth was driven by a 24% increase in domestic sales, rising from 99,735 units in FY 2023 to 123,660 units in FY 2024, complemented by a 49% expansion in exports, growing from 8,044 units to 11,990 units during the same period. All major equipment segments within the CE industry recorded growth during this period, with multiple factors contributing to this performance: enhanced implementation pace of infrastructure projects in the pipeline (particularly in the lead-up to General Elections), a record number of newly awarded projects, increased construction activity across multiple sectors including urban development initiatives, rural sector projects, airport development, and port expansion, as well as an upswing in mining activity. The CE industry is classified into the following categories: earthmoving equipment, concrete equipment, material handling equipment, road construction equipment, and material processing equipment. The Earthmoving Equipment and the broader CE industry continues to benefit from increased budgetary outlay on key infrastructure sectors such as roads and highways, mining and quarrying, housing and urban affairs, ports and waterways, airports, and railways.

The Indian defence sector is undergoing a structural transformation driven by sustained capital expenditure, targeted policy reforms, and a strategic push for self-reliance in defence manufacturing. The Government of India has steadily increased budgetary allocations towards defence, with a sharp focus on capital procurement and indigenous production. The Union Budget for FY 2023–24 allocated Rs 1.62 lakh crore towards capital outlay for the armed forces, representing approximately 30% of the total defence budget. Over the past few years, procurement categories such as Buy (Indian- IDDM) and Buy (Indian) have gained precedence, in line with the Ministry of Defence’s stated objective of enhancing domestic value addition and reducing import dependency. The Defence Acquisition Procedure (DAP) 2020 provides a comprehensive framework to encourage indigenous design, development, and manufacturing of defence platforms and systems. Complementing this, the introduction of the Positive Indigenisation List--comprising components and subsystems earmarked for domestic procurement--has facilitated greater participation from Indian private and MSME manufacturers. Two defence industrial corridors, established in Uttar Pradesh and Tamil Nadu, are expected to create a comprehensive manufacturing ecosystem supporting critical defence platforms and assemblies. Private sector participation in India’s defence manufacturing ecosystem has expanded substantially, aided by reforms such as the corporatisation of the Ordnance Factory Board into seven autonomous Defence Public Sector Undertakings (DPSUs), liberalisation of foreign direct investment (FDI) norms, and implementation of the Defence Acquisition Procedure (DAP) 2020. 

Pros and strengths

Quality assurance and control: The company follows a stringent three-tier quality assurance system--Incoming, In-Process, and Outgoing--to ensure that every product meets the highest quality standards and customer specifications prior to dispatch and installation. As an ISO 9001:2015 certified company, it is committed to delivering consistent quality and reliability. Its comprehensive testing protocols include Micro and Macro analysis, visual inspection, mechanical testing, life expectancy assessments, insulation resistance checks, operational performance tests, continuity verification, and temperature and strength evaluations. These thorough procedures reinforce its dedication to producing safe, durable, and high-performance products. 

Relationship with customers: The company has a proven track record of building and maintaining strong, long-lasting relationships with its clients and suppliers. It prioritizes trust, clear communication, and collaboration in every interaction with its clients. Its dedication in providing service and support has enabled it to establish a reputation for reliability, integrity, and excellence in the industry. These strong relationships are essential for its continued success and growth. 

Diversified business model: The company's diversified business model provides a strong foundation for long-term success. By offering a wide range of products across various market segments, it mitigates risks and capitalize on growth opportunities. Its global footprint spans infrastructure projects, including pipes and flanges, scaffolding and clamps, and GET (Ground Engaging Tools), in the United States, Canada, India, the United Kingdom, Saudi Arabia, and the Middle East. In the defence industry, it offers tanks parts and bomb shells in India. Additionally, it serves the automotive and tractor OEM market in India. This diversification enables it to adapt to changing market conditions and pursue new growth avenues in both established and emerging markets. 

Risks and concerns

Dependent on few numbers of customers: The company is dependent on few numbers of customers for sales. The company’s top ten customers contribute 78.09%, 80.51% and 87.18%, its total revenue from operations for financial year ended March 31, 2025, 2024 and 2023, respectively. The loss of one or more of these significant or key customers or a reduction in the amount of business it obtains from them could have an adverse effect on its business, results of operations, financial condition and cash flows. Any decline in its quality standards, growing competition and any change in demand may adversely affect its ability to retain them.

Maintains high inventory levels: The company currently maintains a high level of inventory to support its operations. However, if there is a significant shift in the business model or a change in market demand, there is a risk that the existing inventory may become obsolete or unsellable. This could result in the need to scrap or write off a substantial portion of the inventory, leading to financial losses. Additionally, carrying high levels of inventory ties up working capital, reducing liquidity and potentially increasing storage costs. 

Dependent on certain key suppliers: The company relies on a limited number of suppliers for the procurement of critical raw materials, components, and subcontracted assemblies necessary for its manufacturing operations. The top ten suppliers accounted for 87.89%, 94.83%, and 93.03% of its total purchases for the financial years ended March 31, 2025, March 31, 2024, and March 31, 2023, respectively. Any interruption in the operations of such suppliers due to financial, regulatory, logistical, or operational challenges, or any deterioration in its relationship with them, may disrupt its production schedule and impair timely fulfillment of customer orders. 

Outlook

Munish Forge is dedicated manufacturer of different types of flanges, Scaffolding components like coupler, ledger, steel pack, Adjustable props & jacks and Ground Engaging Tools, Under Chassis Suspension parts, Jacks, Tractors parts, track chains, bomb shells and fence post, as per customer specifications and International Standard catering to the requirements of various industries such as Defense, Oil and Gas, Tractor, Automobile, Agriculture implements, Construction and Infrastructure. The company’s design centre is equipped with the 3D software, Cad/Cam etc. A skilled team of technicians enables it to continuously improve its manufacturing processes. At every stage of production, from raw material procurement to final product testing, it exercises controls to ensure compliance with international quality standards and meet customer requirements. On the concern side, the company’s business depends heavily on various technology systems ranging from automated machines and software used in production, to systems that help it manage inventory, orders, and customer relationships. If any of these systems fail or stop working properly due to technical issues, power outages, or cybersecurity threats it could disrupt its operations. Even a short disruption in production or communication systems could lead to delays, reduce its efficiency, or affect the quality of its output. 

The company is coming out with a maiden IPO of 77,00,400 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 91-96 per equity share. The aggregate size of the offer is around Rs 70.07 crore to Rs 73.92 crore based on lower and upper price band respectively. On performance front, the company’s total Income increased from Rs 16,158.08 lakh for the financial year ended on March 31, 2024 to Rs 17,863.38 lakh for the financial year ended on March 31, 2025 showing a growth of 10.55%. The company’s Profit After Tax (PAT) increased from Rs 469.78 lakhs for the financial year ended on March 31, 2024, to Rs 1,436.92 lakh for the financial year ended on March 31, 2025.  

The company has identified the railway sector as a strategic growth avenue, given the Government of India’s continued investment in infrastructure, modernization, and domestic manufacturing. It has initiated the registration process with relevant railway authorities to become eligible for government tenders. Upon successful registration and securing of contracts, it plans to commence manufacturing of buffer and Disc as per tender specifications. This will not only diversify its revenue streams but also enable it to enter a long-term, regulated, and infrastructure-driven sector.