Emmforce AutoTech to raise Rs 54 crore through IPO on April 23

Emmforce AutoTech, a Panchkula, Haryana-based aftermarket drivetrain component manufacturer which manufactures niche drivetrain parts such as differential housings, differential locks, 4WD locking hubs, spindles, axles, yokes, and shafts, among others, for America and ASEAN aftermarket, has announced its initial public offering or IPO.

The company's IPO will open on April 23, with fresh issuance of 5,499,600 equity shares with a face value of Rs 10 each, and a fixed price band of Rs 93-98. The IPO that will target to raise Rs 53.90 crore will close on April 25, and Emmforce AutoTech intends to utilise the capital for investing into its subsidiary - Emmforce Mobility Solutions - by setting up a new plant for manufacturing rotavator blades for tractors.

The new 70,000 square feet facility will be set up at Jharmajri, Baddi (Himachal Pradesh), within the existing 150,000 square feet facility located in the region since 2012. The new plant will have a total production capacity of 70 lakh blades annually, catering to around 6 percent of the estimated overall 12.5 crore blade requirement from the Indian agricultural market. The upcoming facility, which is likely to be commissioned by end-May, will also house an in-house forging shop for backward integration and quick turnaround.

While over 98 percent of Emmforce’s business comes from product exports to aftermarket distributors and retailers in markets such as North America, and those in ASEAN region, including Indonesia, and Thailand, the company is eyeing the Indian aftermarket for the first time with rotavator blades which will also be exported to agricultural markets such as the US and Africa.

Emmforce AutoTech will also utilise the capital raised through the IPO for fulfilling its working capital requirements. The company says there is immense potential for it to take its business forward and to seize the China+1 opportunity and explore its full potential. “We are increasingly witnessing an enhanced shift in orders coming to component manufacturers in India. Therefore, this offers us with a tremendous opportunity,” said Ashok Mehta, Managing Director, Emmforce AutoTech.

Emmforce AutoTech clocked Rs 45.69 crore in revenues in FY23, and says it has been registering a CAGR growth of over 25 percent over the last five years.