Balu Forge Industries Ltd: 5 Reasons Why It Makes Sense

The Rationale

1. Naya Energy Works – Future Division

This is a 100% owned subsidiary of Balu Forge Industries Ltd (Current Mcap 2500 Cr). Naya Energy is engaged in the manufacturing of products for the New Energy Sector

What is a Fuel-Agnostic System?

Many more developments are happening in this space. Just search the keyword with “New Energy ” in Annual reports 2021, 2022, and 2023

Naya Energy Division Plans

2. Raising funds through multiple Preferential Issues

Raising funds by issuing shares at ₹115.45/-

Non-Promoter Group: ₹158.47 Cr
Promoter Group: ₹34.63 Cr

Raising funds by issuing shares at ₹ 183.6/-

Non-Promoter Group: ₹45 Cr
Promoter Group: ₹92 Cr

Some interesting names from the Non-Promoter Group:

Here is the disclosure: https://t.co/vZkvG7Em2v

Allotment at Rs. 183.6/-

25L shares allotted to Sixteenth Street Asian Gems Funds – Raised 45 Cr

50L shares allotted to Promoters – Received 25% of 92 Cr = 22.95 Cr#BaluForge https://t.co/RiVqY6ZGg9 pic.twitter.com/K5aFgDWVUs
— Manojeet Das (@Manojeet_Das) December 10, 2023

In total, they plan to raise ₹330.1 Cr

Objectives of the fundraise

Balu Forge Preferential Issue Objectives: https://t.co/Yl5Ud4vac1 pic.twitter.com/1v7N4xedpI
— Manojeet Das (@Manojeet_Das) July 7, 2023

3. Capacity Expansion

Existing Machining capacity to produce 18,000 tonnes of Forged Components per annum. They are increasing it to 32,000 Tonnes per annum

Forging Capacities Comparisions	Balu Forge Industries Ltd	Ramkrishna Forgings Ltd	Bharat Forge Ltd
Capacity (in Tonnes per annum)	18,000 + 14,000 (Capacity to be added)	56,100	7,50,126

NOTE: Bharat Forge Ltd is India’s largest forging company, followed by Ramkrishna Forgings Ltd.

4. End User Industries going through Massive Tailwinds

In an #exclusive interview with CNBC-TV18, #Defence Secretary, Giridhar Aramane, says that two wars have created global insufficiency in defence supplies. However, India has managed to mitigate impact of global shortages in defence sector with domestic production

*Follow thread* pic.twitter.com/Rga87lC7fA
— CNBC-TV18 (@CNBCTV18Live) January 3, 2024

Industries such as Railways, Defence, Locomotive, and Marine are going through massive tailwinds

5. Unusual price movements:

Another one!

Big guys are really trying their best to shake off weak hands#BaluForge https://t.co/A8AG3gC8I3 pic.twitter.com/ZGq7ueixO2
— Manojeet Das (@Manojeet_Das) December 21, 2023

Why not let it go up? Why such big orders are vanishing in 10-15 mins?

And who is buying?

So many questions. Interesting story to track! pic.twitter.com/syVPnCDM4b
— Manojeet Das (@Manojeet_Das) January 3, 2024

Multiple Shakeouts in a Long Consolidation Phase

Disc: We are invested and holding from lower levels around 850-900 Cr Mcap.

See you next time.

Until then… Stay Prudent!

Disclaimer: This article is provided for informational purposes only and should not be considered as an investment advice

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