Balu Forge Industries Allots 20.60 Lakh Equity Shares Through Convertible Warrant Conversion

Balu forge industries has announced the successful allotment of 20.60 lakh equity shares through the conversion of convertible warrants, as approved by the Board of Directors on March 6, 2026. The company issued these shares at Rs. 360 per share, including a premium of Rs. 350, raising a total consideration of Rs. 55.62 crore. Allotment Details and Pricing Structure The equity shares carry a face value of Rs. 10 each and were issued at an all-inclusive price of Rs. 360 per share. The conversion followed a straightforward 1:1 ratio, where each convertible warrant was exchanged for one fully paid-up equity share. Parameter: Details Total Shares Allotted: 20.60 lakh Face Value: Rs. 10 per share Issue Price: Rs. 360 per share Premium: Rs. 350 per share Conversion Ratio: 1:1 Total Consideration: Rs. 55.62 crore Investor-wise Distribution The allotment was distributed between two categories of investors, with the promoter group receiving the majority allocation. Allottee Name: Category Shares Allotted Consideration (Rs.) Jaikaran Jaspalsingh Chandock: Promoter Group 15.00 lakh 40.50 crore Rakesh Hasmukhlal Kanabar: Non-Promoter Group 5.60 lakh 15.12 crore Total: 20.60 lakh 55.62 crore Warrant Conversion Process The convertible warrants were originally issued on a preferential basis, with investors having paid 25% of the total consideration at the time of warrant allotment. The remaining 75% consideration was collected during the conversion process, completing the equity share issuance. Regulatory Compliance The allotment was conducted in accordance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has provided detailed disclosures as required under Schedule III Part A of the SEBI regulations and relevant SEBI circulars dated July 13, 2023, and January 30, 2026. Corporate Leadership The allotment was approved and executed under the leadership of Managing Director Jaspalsingh Chandock (DIN 00813218), who also participated in the conversion as a promoter group member through Jaikaran Jaspalsingh Chandock. The company maintains its registered office at Imperial Palace, Andheri East, Mumbai, and holds multiple ISO certifications including ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018. Balu Forge Industries Limited has entered into a significant Memorandum of Understanding for the supply of large caliber ammunition shells, marking a strategic expansion in the defence sector with substantial revenue implications. The 5-year agreement, dated February 26, 2026, involves supply from the company's greenfield manufacturing campus in Belgaum, Karnataka, and could potentially generate revenue equivalent to 100% of the company's yearly earnings, representing the next phase following its onboarding onto the NATO supply chain. Agreement Overview and Strategic Positioning The MoU aligns with Balu Forge's strategy to build a strong foundation in the defence consumable space, starting with large calibre ammunition and expanding towards medium and small calibre variants in the future. The agreement covers the complete large caliber ammunition category, beginning with 155mm M107, 152mm, and 155mm ERFB/BT variants, with plans to extend to 105mm, 120mm, and 81mm variants. Product Specifications and Volume Commitments The agreement encompasses substantial monthly supply commitments across two primary ammunition categories: Product Type: Monthly Volume Condition Duration 155mm M107: 30,000 units Ready to Fill 5 years 152mm: 10,000 units Ready to Fill 5 years The combined monthly volume of 40,000 units exceeds the company's present capacity, though plans are in place to increase production capacity beyond 360,000 units per annum from internal accruals. Pricing and Revenue Impact Both ammunition variants are priced uniformly at USD 315 per unit on FOB Nhava Sheva terms. The pricing structure includes indexation to the London Metal Exchange to safeguard interests of both buyer and seller against metal price fluctuations. The agreement's revenue potential could represent 100% of the company's yearly revenue, highlighting its transformational impact on business operations. Commercial Parameter: Details Unit Price: USD 315 per unit (both variants) Payment Terms: 20% advance, balance via irrevocable LC Payment Period: Within 30 days from invoice issuance Price Indexation: Linked to London Metal Exchange Revenue Impact: Could equal 100% of yearly revenue Implementation Timeline and Confidentiality The legally binding agreement commenced on February 25, 2026, with serial supply commencement scheduled from April 2026 in a phased ramp-up manner. Initial supplies will focus on 155mm M107 and 152mm variants, with extended range variants (155mm ERFB BB/BT) to be added as addendum following trials and approval. The MoU has been signed with a NATO affiliated entity, with the end user's name remaining undisclosed due to the confidential and sensitive nature of defence supplies. This confidentiality aspect underscores the strategic importance of the agreement within the NATO supply chain framework. Manufacturing Capabilities and Infrastructure Balu Forge operates from a 46+ acre campus in Belgaum, Karnataka, featuring fully integrated forging and machining capabilities. The facility is equipped with high-capacity hydraulic hammers, forging presses, dedicated in-house tool room, metallurgical labs, and CNC machining units, ensuring consistent precision and quality for defence applications. The company's comprehensive product portfolio ranges from 1 kg to 1,500 kg components up to 3 meters in length, supporting diverse applications across automotive, aerospace, defence, and other industrial sectors. This diversified manufacturing expertise positions the company well for defence sector expansion beyond ammunition shells. We’re building Scanx - to help you express your trading & investing idea, to help you analyse the markets better. Stock Markets are the true indicator of the growth of any country's economy. We are bullish on India, we are bullish on India's prospects to be one of largest economies of the world. We believe that Stock Markets provide an unique opportunity for all Indians to participate in the growth story of India. We are enabling the same for Indians. As financial services are becoming more accessible, there is now a large set of Indians today who are financially aware and literate. They value time and seek high quality products & services. 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