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Informist, Wednesday, Apr. 8, 2026

 

NEW DELHI – Kay Jay Forgings Ltd. has filed a draft red herring prospectus with the Securities and Exchange Board of India for an initial public offering comprising a fresh issue of shares of up to INR 3 billion and an offer for sale of up to INR 600 million.

Promoter Gopal Krishan Kothari plans to sell shares worth INR 520 million in the offer for sale, and promoters Amit Kothari and Madhu Kothari plan to sell shares worth INR 30 million each. Promoter group G K Kothari and Sons plans to sell shares worth INR 20 million in the offer for sale. The company proposes to list its shares on the National Stock Exchange and the BSE. PL Capital Markets Pvt. Ltd. is the book-running lead manager for the issue.

Of the total proceeds from the fresh issue, the company intends to invest INR 1.19 billion to set up a forging facility and a machining facility in Ludhiana, Punjab, and a solar power plant in the Sri Mukatsar Sahib district of Punjab. The company will also be using the proceeds to repay certain borrowings in full or in part and has allocated INR 905 million for this.

The offer is being made through the book-building process, in which not more than 50% of the net offer will be allocated to qualified institutional buyers. Non-institutional investors will be allocated not less than 15%, and retail investors will get not less than 35% of the allocation.

 

Kay Jay Forgings makes forged and machined components, primarily catering to original equipment manufacturers in the automotive sector. In the quarter ended September, the company supplied a portfolio of 286 products, with key products including crankshaft and crankshaft assemblies, lower bracket assemblies, lever kick-starter assemblies, gear-shift lever assemblies, propeller shafts, door hinges and steering yokes.

Kay Jay Forgings reported a net profit of INR 214 million for the six months ended September, on a revenue of INR 4.66 billion. The company's net profit for the financial year 2024-25 (Apr-Mar) was INR 290 million, up from INR 241 million for FY24. Its revenue from operations for FY25 was INR 7.50 billion, against INR 6.72 billion the previous year.

The company's total borrowings as on Mar. 15 were INR 1.14 billion. This included secured funds which have a term loan of INR 474 million, vehicle loans of INR 33 million, and working capital of INR 430 million. The company's unsecured loans were INR 198 million.

The company's business remains exposed to customer concentration risk, with its top clients accounting for around 90% of the total revenue, while the absence of long-term contracts limits revenue visibility. Its heavy reliance on the automotive sector and crankshaft segment also exposes it to cyclical demand and long-term risks from the shift towards electric vehicles. Further, volatility in steel prices, a key raw material, could put pressure margins. (Gunjan Rajput)  End

 

Edited by Ashish Shirke

 

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