Advance Technoforge Limited         

1. Overview

Advance Technoforge Limited is a Rajkot (Gujarat)-based manufacturer of forged and precision-machined steel components, specializing in Closed Die Forging, Upset Forging, and Ring Rolling Forging techniques applied across Carbon Steel, Alloy Steel, and Stainless Steel. Originally incorporated as a private limited company in August 2013, the Company converted to a public limited company in September 2024 ahead of its IPO. Its installed forging capacity stands at 6,000 MTPA, spread across three operational production lines at its Veraval Shapar (Rajkot) facility, with a fourth line already installed and expected to commence commercial production by the end of FY2026-27, taking total capacity to 7,250 MTPA.

The Company operates as a component supplier to Original Equipment Manufacturers (OEMs) across a diversified set of end-markets, including automotive, oil & gas, earth-moving and agricultural equipment, material handling, power transmission, and general engineering. Its products serve both domestic and export markets, with export revenue contributing a meaningful share of the top line. The Company holds a suite of quality accreditations — IATF 16949:2016 (automotive), ISO 9001:2015 (general quality management), PED-2014/68/EU and AD 2000 W0 (pressure-containing parts), and IBR 1950 (boiler parts) — positioning it to serve safety-critical, close-tolerance applications that act as entry barriers for less-certified competitors.

The Company's near-term growth plan is centered on a capacity expansion into aluminium forging (600 MTPA) aimed at the EV component segment, funded substantially from this IPO's Net Proceeds.

2. Business Model and Revenue Streams

Revenue Composition

Advance Technoforge derives revenue predominantly from Domestic Sale of Products, with a smaller but growing Export contribution:

Export revenue has more than doubled from FY2024 to FY2026 (₹672.09 Lakhs to ₹1,433.95 Lakhs), now representing close to 30% of gross product sales, indicating a deliberate push toward international OEM relationships even as domestic sales softened.

Customer Concentration

The Company exhibits meaningful — though improving — customer concentration risk:

The declining concentration ratios across all tiers over three years indicate a broadening customer base, partly influenced by a temporary loss of orders from the Top 1 Customer in FY2025 due to US tariff actions — orders have since resumed following a bilateral tariff settlement, per Company disclosures.

Vendor Dependency

The Company similarly depends on a concentrated supplier base for steel (its primary raw material), though supplier concentration has also been trending down, with Top 10 Suppliers accounting for 40.10% of revenue-equivalent purchases in FY2026, down from a peak of 44.65% in FY2025. Notably, the Company does not have long-term supply agreements, relying instead on purchase orders.

Industry-Specific Operating Metrics

Capacity utilization has hovered around the 50% mark for three consecutive years, underscoring meaningful headroom for organic volume growth even before the planned Line 4 and aluminium-segment expansion come online.

3. Products and Service Portfolio

Product Range

The Company's product catalogue spans 26+ distinct machined-forged component types, serving multiple end-use segments:

Manufacturing Infrastructure

Capacity Roadmap

The planned 600 MTPA aluminium forging line, funded from IPO proceeds, is explicitly targeted at supplying Close Die Aluminium Forging components for the EV segment — positioning the Company for a segment shift into lighter-weight, EV-relevant components, distinct from its legacy ferrous-metal product base.

4. Key Business Strengths

• Strategic location of manufacturing facilities — Rajkot, Gujarat is a well-established forging and engineering manufacturing hub with strong ancillary infrastructure and labor availability.
• Experienced promoters and management team — Promoters Nilesh Moliya and Pradipbhai Vora each bring approximately 12 years of experience with the Company since its incorporation.
• Established customer base for products and byproducts — long-standing OEM relationships across diversified end-industries reduce single-sector cyclicality.
• Strong existing client relationships — despite concentration, the top-customer share has structurally declined over three years, indicating successful account diversification.
• Flexible operations tailored to customer-specific requirements — capability across multiple metal grades (Carbon, Alloy, Stainless Steel) and forging techniques.
• Strong technical and execution capabilities — multi-standard quality certification (IATF, ISO, PED, AD 2000W0, IBR) supports qualification for safety-critical OEM supply contracts.

5. Future Growth Strategy

• Capacity expansion into aluminium forging — installation of a dedicated 600 MTPA aluminium product line targeted at the electric vehicle (EV) component segment, using ~₹719.31 Lakhs of Net Proceeds.
• Utilization uplift on existing ferrous capacity — with utilization near 50%, the Company has substantial headroom to grow ferrous-segment revenue without fresh capital expenditure.
• Deepening export markets — building on export revenue that has more than doubled in two years, to reduce dependence on the domestic OEM cycle.
• Working capital strengthening — deployment of ~₹725 Lakhs of Net Proceeds toward working capital to support scale-up without over-reliance on short-term borrowings.
• Balance sheet deleveraging — repayment/prepayment of existing borrowings (~₹229.50 Lakhs from Net Proceeds) to improve the Debt-to-Equity ratio, which has already improved from 1.83x (FY2025) to 1.29x (FY2026).
• Broadening customer diversification — continuing the multi-year trend of reducing single-customer and top-10-customer revenue concentration.