About the Company:
Emmforce AutoTech Ltd is engaged in the business of manufacturing niche automotive drivetrain parts.
Company manufactures parts like Differential Housings, Differential Lockers, Differential Covers,4WD Locking Hubs, Spindles, Axles & Shafts, Gear Shifters, Yokes, Differential Spools, Differential Tools and various differential forged / cast parts primarily for 4-wheel Drive and performance racing vehicles.
Company has established itself as a manufacturer of Drivetrain Parts in India and is one stop shop for quality cost competitive drivetrain parts and providing out-of-the-box solutions to its customers through designing and development of complex / special parts.
Company has Huge inventory of tooling for forging and machining, jigs and fixtures for machining, extra focus on engineering gives Emmforce an edge over the competition to develop new parts in a much faster time than competition.
Company offers fully integrated engineering solutions from conceptualization, development and validation to implementation and manufacturing of our products.
Company’s Promoter Background:
Company’s Chairman and Managing Director, Mr. Ashok Mehta who has 32 years of experience in this industry. Though a chartered accountant by education, he is the author of world’s first book ever written on axle shafts by the name of “The World around Axle Shafts”. He has been instrumental in determining the vision and growth strategies for the Company.
Company’s Client List includes names like:
- Sonalika International.
- TAFE.
- Swaraj.
- Ford.
- Yanmar.
- Indo Farm.
- Dorman.
Products Manufactured by the Company:
- Differential Forged and Cast Parts.
- Hubs and Spindles.
- Differential Tools.
Differential Forged and Cast Parts.
Company manufactures a wide variety of Differential Forged/Cast Parts like Differential Housings, Differential Lockers, Differential Covers, Gear Shifters, Yokes, Differential Spools, Pinion Supports, etc. under one roof at its fully integrated manufacturing plant at Baddi, Himachal Pradesh.
Hubs & Spindles.
Company makes an extensive range of 4WD Locking Hubs, Floater Hubs and Spindles. 4WD locking hubs play a crucial role in the operation of a four-wheel-drive (4WD) vehicle. These hubs are typically located on the front wheels and serve as a connection point between the front axle and the front wheels.
Company manufactures a wide range of spindles for street use cars, trucks as well as motor sports applications at its fully integrated manufacturing plant at Baddi and this range has been growing over a period of time.
Differential Tools.
Differential Parts are expensive and proper tools are required to dismantle and assemble the same in order to avoid damage to these. Company has developed a range of special differential tools like Clamshell style bearing pullers for differential housing spreaders that not only save the parts but also make the life of mechanics easier.
Company’s Subsidiary Emmforce Mobility Solutions Pvt. Ltd
Emmforce has recently invested in Emmforce Mobility Solutions Pvt. Ltd. (EMSPL) by buying 80% of its shareholding from Emmbros Automotives Pvt. Ltd. at book value thus making it subsidiary of Emmforce on December 19, 2023.
EMSPL is actually situated in the premises of Emmforce only and was setup last year for manufacturing of forgings and Rotary Tiller Blades. The rotary tiller blade plant highly automated through robots and transfer presses and is one of its kind wherein majority of the key equipment are Japanese and being procured from the industry leaders.
The plant is going to be in commercial production before February, 2024.
Company’s Key Operational Parameters:
Management Team:
- Mr. Ashok Mehta (Designation: Chairman cum Managing Director)
- Mr. Azeez Mehta (Designation: Whole-Time Director & CFO)
Objectives of the Issue:
Fresh Issue: (Rs.54 cr)
- Investment in Subsidiary Company i.e. Emmforce Mobility Solutions Private Limited (EMSPL) in form of equity or debt for meeting the requirement of working capital and margin money for term loan of Subsidiary Company.
- To Meet Working Capital Requirement of our Company.
- General Corporate Purpose.
Fund Utilization:
| Particulars | Amount (Rs. in Crores) |
|---|---|
| Investment in Subsidiary Company i.e. Emmforce Mobility Solutions Private Limited (EMSPL) in form of equity or debt for meeting the requirement of working capital and margin money for term loan of Subsidiary Company. | 10 cr |
| To Meet Working Capital Requirement of our Company | 27 cr |
Positives for the Company:
Company has Engineering Excellence in its Domain.
- With inhouse research, design and development along with deep knowledge of variety of materials and processes, company is able to provide out-of-the-box market driven innovative & niche automotive products that help grow the business and profitability of our customers.
One Stop Solution for Drivetrain Parts.
- Company manufactures wide variety of drivetrain parts under one roof. Buying a variety of parts from one supplier helps save a lot of logistics cost and releases the management bandwidth of the customer thus making us the preferred supplier.
- Company has a warehouse in United States through our Group Company, which strengthens company’s product distribution and helps in saving the customer from the hassles of importing LCLs (Less than Container Load), longer lead time and spending a lot of time and money in customs clearance.
Existing client relationship.
- Company has earned reputation based upon which company have been successful in retaining reputed clients. Company’s existing customer relationship that goes as far as almost two decades helps us to get repeat business from customers.
- This has helped company maintain a long-term working relationship with customers and improve our customer retention strategy. Company believes that our relationship with the existing customers represents a competitive advantage in gaining new customers and increasing our business.
Company’s One Stop Solution Approach.
- Company boast at being a one stop shop for our customers in majority of the parts we make. Manufacturing of Rotavator Blades was also a strategic decision on the same lines.
- Company will be among of few manufacturer in the country to have the manufacturing capability and setup to cater to more than 60% of the Bill of Material required for manufacturing a Rotavator.
Company plans to launch some products for EV vehicles.
- Company’s engineering team is working aggressively in venturing into EV space and company will soon announce the launch of an exciting product for EV vehicles.
Financials of the Company:
| (in Crores) | FY 21 | FY 22 | FY 23 | Upto 13th Oct 23 |
|---|---|---|---|---|
| Revenue | 51.85 | 71.38 | 48.75 | 42.7 |
| Net Profit | 5.08 | 7.32 | 4.38 | 4.68 |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| Emmforce Autotech Ltd | 10 | 2.93 | 33.44 | 18.71% | 15.63 |
| Divgi Torqtransfer Systems Ltd | 10 | 18.45 | 44.31 | 9.28% | 360.53 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 23rd April 2024 |
| Issue Closes on | 25th April 2024 |
| Issue Price | Rs.93 -98 |
| Face Value | Rs.10 |
| Minimum Lot | 1200 Shares |
| Minimum Investment | Rs.1,17,600 |
| Issue Constitutes | 26.82 % |
| Issue Size | Rs.54 cr |
| Market Cap | Rs.200 cr |
| Listing at | NSE SME |
| Equity Shares Offered (Fresh) | 54,99,600 (Rs.54 cr) |
| Equity Shares Prior to the Issue | 1,50,00,000 |
| Equity Shares after the Issue | 2,04,99,600 |
Important Dates:
| Finalization of Basis of Allotment | on or Before 26th April 2024 |
| Initiation of Refunds | on or Before 29th April 2024 |
| Credit of Equity Shares: | on or Before 29th April 2024 |
| Listing Date: | on or Before 30th April 2024 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 2.93 | 33.44 | 18.71% | 15.63 |
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| Should You Subscribe or Not ? (Markets Guruji’s View) |
|---|
| Emmforce AutoTech Ltd specializes in crafting high-quality automotive drivetrain components, catering to the discerning needs of 4-wheel drive and performance racing vehicles. Company’s diverse product line includes Differential Housings, Lockers, Covers, 4WD Locking Hubs, and an array of forged and cast parts, ensuring superior performance and durability.
With a focus on innovation and leveraging cutting-edge automation, Company’s in-house R&D capabilities position itself as a leader in the niche market, offering solutions with limited competition. However, challenges loom, particularly concerning bargaining power with suppliers due to the low sales volume of certain components. Moreover, the landscape is shifting with the emergence of increased competition from both local and larger players, necessitating a strategic response. Additionally, the burden of substantial outstanding debt raises concerns, urging potential investors to exercise caution, perhaps considering delaying participation in the IPO until the company’s financial outlook stabilizes.A prudent approach would be to monitor the company’s performance over subsequent quarters, allowing for a reassessment of investment prospects when the financial landscape becomes clearer. However, investors with a healthy appetite for risk and a long-term perspective can apply in this IPO. |
| Company Contact Info: |
|---|
| Emmforce Autotech Limited Plot No. 287, Industrial Area, Phase II Industrial Estate Panchkula- 134113, Haryana, India Tel. No.: +91- 9876009999 E-mail: info@emmforce.com Website: www.emmforce.com |
| Registrar to the Issue: |
|---|
| LINK INTIME INDIA PRIVATE LIMITED Address: C 101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai- 400083, Maharashtra, India Tel. No.: +91-8108114949 Email: emmforce.ipo@linkintime.co.in Website: www.linkintime.co.in |
| Lead Manager to the Issue: |
|---|
| BEELINE CAPITAL ADVISORS PRIVATE LIMITED B 1311-1314, Shilp Corporate Park, Near Rajpath Club, Rajpath Rangoli Road, Sarkhej- Gandhinagar Hwy, Ahmedabad- 380054, Gujarat, India. Tel. No.: +91-79-48407357 Email: mb@beelinemb.com Website: www.beelinemb.com |
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|---|
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