Precision engineering and manufacturing company Balu Forge Industries Ltd. will raise up to Rs 497 crore through a combination of preferential issues of equity shares and fully convertible warrants to strengthen its manufacturing capacity and spend on special research and development initiatives.
The board on Tuesday approved an issue of 45 lakh equity shares at Rs 350 apiece, aggregating up to Rs 162 crore by way of preferential issue to non-promoter public category investors, according to a press release.
It also greenlighted an issue of 63 lakh fully convertible warrants to non-promoter public category investors and 30 lakh fully convertible warrants to the promoter category at an issue price of Rs 360 per warrant. This amounts to Rs 226.8 crore.
Use Of Proceeds
Balu Forge plans to allocate a significant portion of the new funds towards specialised research and development initiatives aimed at enhancing engineering capabilities in the defence and aerospace sectors. The company is set to introduce a new 'Direct Drive Screw Press Line' designed to manufacture high-precision components for aerospace applications.
Balu Forge will also establish a Special Purpose Machine line dedicated to defence production. The company's product range encompasses a diverse portfolio catering to the railways, defence, and aerospace industries, highlighting its commitment to advancing technological capabilities and expanding market presence in critical sectors.
The fundraise is part of a strategy to further diversify the company's manufacturing capacity, said Whole-Time Director Trimaan Chandock.
The Mumbai-based company is actively pursuing transfer of technology and contract manufacturing agreements with global companies, focusing on defence, railways, and aerospace sectors. It intends to invest in solid wheel rolling machinery to manufacture railway wheels up to 1,300 millimetres in diameter.
Shares of Balu Forge Industries were trading 0.72% lower at Rs 412.3 apiece at 3:00 p.m., compared to a 0.13% advance in the benchmark BSE Sensex. The announcement came during market hours.
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