Bharat Forge Ltd Share Price – NSE /  BSE

Castings, Forgings & Fastners, Small Cap

Bharat Forge announced that its wholly owned subsidiary, Kalyani Strategic System (KSSL) has completed the acquisition of 25% of total share capital of Edgelab S.p.A. (Edgelab), pursuant to its proposed initial public offer. KSSL has been allotted 769,000 Ordinary Shares of Edgelab at a price of € 3.25 per share.

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The agency has affirmed the company’s short-term rating at 'CARE A1+’.

CARE Rating stated that the reaffirmation of the ratings assigned to the bank facilities and instruments of Bharat Forge (BFL) continue to factor its established market position as India’s largest manufacturer and exporter of auto components, consistently healthy profitability in the Indian manufacturing operations and long-standing relationship with global automotive original equipment manufacturers (OEMs) and Tier-I suppliers, particularly in the commercial vehicle (CV) segment.

The rating has positively factored the robust order book position in the defence segment, ramp-up of the greenfield aluminium forging capacity in North America and the funds raised through qualified institutional placement (QIP), which will be largely utilized towards debt repayment/pre-payment.

The rating strengths are constrained due to working capital intensive operations and volatility in end-user sectors.

Despite diversification, even today, a large proportion of its revenue is derived from the automotive segment, thereby exposing the company to inherent cyclicality of the automobiles industry.

The ratings are further constrained on account of the susceptibility of the operating margins to commodity price risk and forex risk.

Turnaround in the performance of overseas operations and any large-sized unanticipated debt-funded capex or acquisitions leading to deterioration in the capital structure and debt coverage metrics from the existing levels would continue to remain the key rating monitorable.

Bharat Forge (BFL) is the flagship company of the Kalyani Group providing engineering solutions for diverse automotive and industrial applications. It is India’s one of the largest forging company with forging-based engine and chassis components with focus on crankshafts and front-axle beams, largest exporter of auto components and amongst the leading manufacturers of industrial components. It has a diversified global customer base including the top five CV and PV manufacturers in the world.

The scrip rose 0.88% to currently trade at Rs 1,291.05 on the BSE.

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Bharat Forge announced that its wholly owned subsidiary Kalyani Strategic Systems has entered into a Cornerstone Investment Agreement(Cornerstone Investment Agreement) with Edgelab S.p.A, Italy (Edgelab) on 13 December 2024 for the acquisition of 25% of Edgelab's equity share capital, pursuant to its proposed initial public offer.

Edgelab is an Innovative SME with expertise in designing and manufacturing of high-tech vehicles in the field of marine robotics, with a variety of application areas including scientific research, archaeology, undersea, offshore applications, underwater professional and port area control. Edgelab specializes in design and manufacture of Autonomous Underwater Vehicles for both civilian purposes and defense applications.

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Bharat Forge announced the successful fund raise of Rs 1,650 crore with the closure of its qualified Institutional Placement (QIP) on 9 December 2024.

The issue witnessed significant interest across Domestic & Foreign Qualified Institutional investors resulting in more than 10X demand of the issue size. More than 90% allocation was made to marquee Domestic & Foreign Long Only funds and Insurance Companies.

The issue of the QIP was done at Rs 1,320 per share while the floor price as per SEBI ICDR was Rs 1,323.54 per share. The QIP proceeds will be utilized for debt repayment and funding of earlier announced inorganic growth initiatives.

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