Kay Jay Forgings Limited IPO

01At a glance

What the company does: forges and machines steel components for vehicle makers: crankshafts and crankshaft assemblies, lower bracket assemblies, kick-starter and gear-shift levers, propeller shafts, door hinges and steering yokes, 286 products in the six months to September 2025 (AP p.3). It has six plants, four in Ludhiana and two in Hosur, Tamil Nadu (AP p.3).

Who pays it: vehicle makers; TVS Motor Company alone was 64.94% of revenue in the six months to September 2025, and other customers include Honda Motorcycle and Scooter India and Mahindra and Mahindra (AP p.3, DRHP p.36). The top ten customers were 91.51% of revenue (DRHP p.36).

Why it is raising money: ₹1,188.03 million for a new forging plant and a new machining plant in Ludhiana and a solar plant in Sri Muktsar Sahib district, ₹905.11 million to repay borrowings, and the rest for general purposes (AP p.5, DRHP p.106).

How fast it has grown: revenue from ₹6,027 million in FY23 to ₹7,505 million in FY25, and ₹4,661 million in the six months to September 2025 (AP p.6).

The one thing to understand: a specialist supplier tied to one customer. The CARE report cited in the document says the company is India's largest supplier of two-wheeler crankshafts to OEMs, with about 36% of the domestic market in FY25, and TVS Motor, a customer for over 37 years, has taken 64.94% to 69.14% of its revenue in each period (AP p.3, DRHP p.36).

02The business, in plain words

A forging company heats steel bars, presses them into shape in dies, and machines them to fine tolerances, producing parts that go into an engine or chassis. It supplies a vehicle maker's assembly line against purchase orders.

A two-wheeler maker schedules production of a motorcycle model → it orders crankshaft assemblies from Kay Jay → the company forges and machines them in Ludhiana or Hosur from bought steel → it delivers to the assembly plant and is paid on credit terms.

Steel is the main raw material; materials and components were 52.61% of revenue in the six months to September 2025 (AP p.7). Exports were 9.84% of revenue in that period, to countries including Hungary, France, Germany, Sweden and the USA (AP p.3, AP p.7).

Earnings equation: Profit ≈ parts shipped × (price per part − steel and machining cost) − interest. EBITDA margin was 9.56% in the six months (AP p.6).

03Where the money comes from

Source: DRHP p.36, AP p.7. H1 FY26 is six months. Customer shares exclude scrap sales (DRHP p.36).

The automotive sector was 93.80% of revenue from operations in the six months to September 2025 (AP p.7). The company served 44 customers over FY23 to September 2025 (DRHP p.36).

04The growth record

Source: AP p.6. H1 FY26 is six months.

05What the growth is made of

Steady growth with its main customer. Revenue grew 11.55% in FY24 and 11.62% in FY25 (our arithmetic, AP p.6). Six-month revenue to September 2025 was 62% of the whole of FY25 (our arithmetic, AP p.6). Gross margin rose from 42.30% in FY23 to 47.18% in FY25 as materials fell as a share of revenue (AP p.6, AP p.7).

06Earnings quality

Operating cash flow exceeded profit in every full year (AP p.6). Trade receivable days were 29 in FY23, 24 in FY24, 24 in FY25 and 25 in the six months to September 2025 (DRHP p.49). The abridged prospectus prints investing and financing cash flows without brackets, but the DRHP describes investing flows as cash used in each period and financing as cash used in FY25 (AP p.6, DRHP p.365). The auditors made no qualifications, reservations or adverse remarks (AP p.8).

07The balance sheet

Source: AP p.6, AP p.7.

Borrowings were ₹1,137.76 million at 15 March 2026 (DRHP p.366). The ₹905.11 million for repayment is 80% of that (our arithmetic).

08What the money is for

Source: AP p.5.

The new forging and machining plants are to be in Ludhiana and the solar plant at Village Buttar Bakhua, Gidderbaha tehsil, Sri Muktsar Sahib district, Punjab (DRHP p.106). A pre-IPO placement of up to ₹400 million may reduce the fresh issue (AP p.5).

09Who is selling

Source: AP p.1. The last row's amount is our arithmetic from the ₹600 million total.

Most of the promoters' shares came from a 15-for-1 bonus issue, which is why their recent acquisition cost is nil (DRHP p.128, AP p.8).

10Promoters

The promoters are Gopal Krishan Kothari and Amit Kothari (AP p.4). Gopal Krishan Kothari, chairman and managing director, holds a commerce degree from the University of Rajasthan and has over 40 years in the automotive sector with the company (AP p.4). Amit Kothari, executive director, holds a postgraduate diploma in business administration from the University of Wales, Cardiff, and has over 29 years with the company (AP p.4).

11Who already owns it

Source: AP p.5.

Promoters hold 92.62% and the promoter group 7.25% (AP p.5).

12What changed just before the IPO

• Bonus issue: 15-for-1, taking the share count to 45,975,360 (DRHP p.128).
• Debt: borrowings down from ₹1,423 million in March 2023 to ₹838 million in September 2025 (AP p.6).
• Exports: up to 9.84% of revenue in the six months (AP p.7).
• Share splits: the face value went from ₹100 to ₹10 in December 2022 and from ₹10 to ₹5 in August 2025 (DRHP p.94, DRHP p.97).
• Last allotment: the 15-for-1 bonus issue of 18 August 2025, at nil consideration (DRHP p.97).
• Auditor: Mohinder Vij & Associates was replaced by Goyal Sanjay & Associates as statutory auditor in September 2024 (DRHP p.87).
• Company form: the company became a public limited company in December 2024 (DRHP p.12).

13Capacity and expansion

Installed capacity was 36,900 tonnes a year in FY23 and 40,100 in FY24 and FY25; the document gives 21,050 tonnes for the six months (AP p.7). The proceeds add a new forging plant and a new machining plant in Ludhiana, and a solar plant for power (DRHP p.106). The split of the ₹1,188.03 million among the three was not read for this study.

14Market size and industry structure

The CARE report cited in the offer document estimates India's automotive forging market at $2.6 billion in FY25 and projects $4.1 billion by FY30; it estimates the global market at $45.1 billion in 2025 (AP p.4). Those projections are CARE's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Market leadership in two-wheeler crankshafts, about 36% of domestic OEM supply, citing CARE (AP p.3).
• Long relationships: supplying TVS Motor for over 37 years (DRHP p.36).
• Backward integration from forging to machining (AP p.4).

Against that: one customer, one sector, no long-term contracts, and larger listed forging peers (AP p.7, DRHP p.129).

16Peers the company named

Source: DRHP p.129. Peer P/E uses prices on 25 March 2026.

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• One customer. TVS Motor is about two-thirds of revenue (DRHP p.36).
• No contracts. Customers order without long-term agreements (AP p.7).
• Steel. Price swings in the main raw material (AP p.7).
• Automotive cycle. 94% of revenue from vehicles (AP p.7).
• Two regions. All plants in Ludhiana and Hosur (AP p.7).
• New plants. Execution of two new facilities (AP p.5).

18Litigation and regulatory matters

Source: AP p.9. One criminal and one regulatory proceeding are also outstanding against key managerial personnel or senior management (AP p.9).

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

In the sections read for this study, the document does not give:

• How the ₹1,188 million is split among the three new plants, in the pages read.
• The terms of supply to TVS Motor, or when current arrangements end.
• What the criminal proceedings against a promoter and two directors concern, in the pages read.
• Correct signs for cash flows in the abridged prospectus summary.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. How is pricing with TVS Motor set, and how often is it revised for steel costs?
2. What products will the new forging and machining plants make, and for which customers?
3. How does the company plan to reduce its dependence on TVS Motor, and over what period?
4. What do the criminal proceedings against a promoter and two directors concern?
5. What was capacity utilisation at each of the six plants, and why are new plants needed rather than more use of existing ones?

2Sources and cited facts

This study was read from 2 documents the company filed. The 63 figures it cites are listed under the document each came from, with the page and the sentence as printed.