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Ganga Forging NSE SME IPO review (Avoid)

Review By Dilip Davda on June 22, 2018

Ganga Forging Ltd. (GFL) is engaged in manufacturing of closed die forged products catering to both automotive and non-automotive segment. Automotive segment include manufacturing of products catering to commercial vehicle, passenger car, three wheeler, two wheeler and tractor. Non-automotive segment include electric power transmission, dairy equipment manufacturing, agricultural, gear and gear box, crank shafts, connecting road, heavy engineering industrial, hubs and flanges.


To part finance its plans to set up closed die forging manufacturing plant and general corpus fund needs, GFL is coming out with a maiden IPO of 2382000 equity shares of Rs. 10 each at a fixed price of Rs. 21 per share to mobilize Rs. 5.00 crore. Issue opens for subscription on 29.06.18 and will close on 03.07.18. Minimum application is to be made for 6000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. and Link Intime India Pvt. Ltd. is the registrar to the issue. Issue constitutes 29.97% of the post issue paid up capital of the company. Having issued initial equity at par, it raised further equity in the price range of Rs. 21 to Rs. 21.70 and has also issued bonus shares in the ratio of 1.5 to 1 (February 2003) and 9 for 1 (September 2017). It has shown wrong ratio of 9 for 1 bonus in February 2003 (page no. 74 of offer document). Average cost of acquisition of shares by the promoters is Rs. 8.46 and Rs. 9.12 per share. Post issue, GFL’s current paid up equity capital of Rs. 5.57 cr. will stand enhanced to Rs. 7.95 cr.


On performance front, for last four fiscals, GFL has posted turnover/net profits of Rs. 16.96 cr. / Rs. 0.61 cr. (FY14), Rs. 15.57 cr. / Rs. 0.47 cr. (FY15), Rs. 17.69 c.r / Rs. 0.25 cr. (FY16) and Rs. 17.79 cr. / Rs. 0.48 cr. (FY17). For first nine months ended on 31.12.17 of FY18 it has earned net profit of Rs. 0.39 cr. on a turnover of Rs. 18.18 cr. Thus it has shown inconsistency in top and bottom lines for all these years. For last three fiscals it has posted an average EPS of Rs. 1.15 and an average RoNW of 11.05%. Issue is priced at a P/BV of 1.42 based on its NAV of Rs. 14.81 as on 31.12.17 and at a P/BV of 1.26 based on post issue NAV of Rs. 16.69. If we annualize latest earnings and attribute it to fully diluted equity post issue, then asking price is at a P/E of around 32 thus issue is aggressively priced around industry average.


On merchant banker’s front, this is 76th mandate from its stable in last four fiscals and out of last 10 listings 2 opened at par and the rest with a premium ranging from 2.86% to 40% on the day of listing. (as per offer documents).

Conclusion / Investment Strategy

Considering Inconsistency in financial track record and aggressive pricing, there is no harm in giving this issue a miss. (Avoid)

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on June 22, 2018

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.

About Dilip Davda

Dilip Davda

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

(Dilip Davda -SEBI registered Research Analyst-Mumbai,

Registration no. INH000003127 (Perpetual)

Email id: ).

Ganga Forging (GFL) IPO FAQs

  1. 1. Why Ganga Forging (GFL) IPO?

    The initial public offer (IPO) of Ganga Forging Limited offers an early investment opportunity in Ganga Forging Limited. A stock market investor can buy Ganga Forging (GFL) IPO shares by applying in IPO before Ganga Forging Limited shares get listed at the stock exchanges. An investor could invest in Ganga Forging (GFL) IPO for short term listing gain or a long term.

  2. 2. How is Ganga Forging (GFL) IPO?

    Read the Ganga Forging (GFL) IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Ganga Forging (GFL) IPO what should investors do?

    Ganga Forging (GFL) IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Ganga Forging (GFL) IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is Ganga Forging (GFL) IPO good?

    Our recommendation for Ganga Forging (GFL) IPO is to avoid.

  5. 5. Is Ganga Forging (GFL) IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Ganga Forging (GFL) IPO.

  6. 6. When will Ganga Forging (GFL) IPO allotment status?

    The Ganga Forging (GFL) IPO allotment status will be available on or around July 6, 2018. The allotted shares will be credited in demat account by July 10, 2018. Visit Ganga Forging (GFL) IPO allotment status to check.

  7. 7. When will Ganga Forging (GFL) IPO list?

    The Ganga Forging (GFL) IPO will list on Wednesday, July 11, 2018, at NSE SME.