Metalman Auto has submitted draft papers to SEBI for an IPO aimed at raising funds

Metalman Auto Ltd. has officially filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise funds through an Initial Public Offering (IPO). This strategic move aims to secure a total of ₹350 crore through a fresh issue of equity shares, alongside an offer-for-sale component comprising approximately 1.26 crore shares, each with a face value of ₹2. The company is a pioneer in metal fabrication, finishing, and assembly in India. It specializes in manufacturing metal components for two-wheelers (including electric and combustion engines), three-wheelers, passenger vehicles, commercial vehicles, agri-vehicles, and off-highway vehicles.

The company also fabricates aesthetic components for white goods (e.g., washing machine panels) and offers contract manufacturing for 2W EV OEMs. In FY24, Hero, Bajaj, Honda, and TVS dominated India's two-wheeler market, accounting for over 80% of annual sales. the company supplied frames/chassis for one in four high-speed EV scooters sold in India, one in five 2W motorcycles exported, and one in ten 2Ws sold domestically, solidifying its position as a key 2W segment supplier, during the same period.

 

The firm reported revenue of Rs 1,508 crore compared to Rs 1,051 crore a year ago , In FY24. EBITDA for the fiscal stood at Rs 131.72 crore versus Rs 117.84 crore last year. Net profit for the period was at Rs 50 crore as against Rs 63.11 crore a year ago.

Purpose of the IPO

The net proceeds from this IPO will be allocated for several key purposes:

1. Capital Expenditures : A significant portion will be directed towards financing the procurement of new plants, enhancing production capabilities.

2. Repayment of Borrowings : The funds will also be utilized to reduce existing debts, thereby improving the company's financial health.

3. General Corporate Purposes : Additional funds will support various corporate initiatives that align with the company's growth strategy.

Promoters and Management

The IPO will see shares being sold by several key promoters, including Bikramjit Bembi, Navneet Jairath, Sachin Bembi, and Nishant Jairath. Additionally, Sonia Bembi Seth and Nisha Jairath are part of the promoter group. The underwriting for the IPO will be managed by Axis Capital Ltd., ICICI Securities Ltd., and Motilal Oswal Investment Advisors Ltd., who will act as the book-running lead managers.

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