Kay Jay Forgings IPO

Strengths · 7

• 01Kay Jay is the largest supplier of forged crankshafts and crankshaft assemblies to two-wheeler OEMs in India, with an estimated 36% domestic market share in Fiscal 2025 (CARE report).
• 02Revenue from operations rose from Rs 602.69 crore in FY2023 to Rs 750.46 crore in FY2025, and PAT rose from Rs 13.81 crore to Rs 29.02 crore.
• 03PAT margin improved from 2.29% in FY2023 to 3.87% in FY2025, and gross margin rose from 42.30% to 47.18%.
• 04Total borrowings fell from Rs 142.32 crore in March 2023 to Rs 101.88 crore in March 2025, and debt to equity fell from 1.29 times to 0.63 times.
• 05Operating cash flow was positive in all periods shown: Rs 58.66 crore in FY2025 and Rs 52.87 crore in FY2024.
• 06The company has six plants, four in Ludhiana and two in Hosur, with installed capacity of 40,100 MTPA in FY2025 against 36,900 MTPA in FY2023.
• 07Promoters and promoter group hold 99.87% before the issue, and the statutory auditors have no qualifications in the restated financials.

Risks · 10

• 01The top 10 customers gave 90.00% of revenue in FY2025, and the top 5 gave 83.37%. Losing one of them would hurt sales.
• 02The company has no long-term agreements with customers to place orders with it.
• 03The automotive sector gave 93.52% of revenue from operations in FY2025, so a downturn in vehicle demand would hit sales directly.
• 04Steel is the main raw material. Raw materials and components were 53.68% of revenue in FY2025, and much of the procurement has no long-term agreement.
• 05All plants are in two regions, Ludhiana in Punjab and Hosur in Tamil Nadu, so a regional disruption could stop production.
• 06The company depends on crankshafts, and the DRHP flags the shift to EVs as a risk to long-term revenue.
• 07Of the Rs 360.00 crore offer, Rs 60.00 crore is an offer for sale. That money goes to the promoters and promoter group sellers, not to the company.
• 08General corporate purposes amount is not yet disclosed and can be up to 25% of gross proceeds.
• 09Return on equity for the six months to September 2025 was 11.59% (not annualised), against 17.81% in FY2025.
• 10Litigation is outstanding against the company, promoters and directors, including 1 criminal case and 1 tax case against the promoters. The amount against the company is Rs 10.87 million.

Kay Jay Forgings Limited is a precision engineering company that makes forged and machined components. Its main customers are original equipment manufacturers (OEMs) in the automotive sector. The company was incorporated in 1983 and is based in Delhi, with its corporate office in Ludhiana, Punjab.

According to the CARE report quoted in the DRHP, Kay Jay is the largest supplier of crankshafts and crankshaft assemblies to two-wheeler OEMs in India, with an estimated domestic market share of about 36% in Fiscal 2025. In the six months to 30 September 2025 it supplied 286 products. Key products include crankshaft assemblies, lower bracket assemblies, lever kick-starter assemblies, gear-shift lever assemblies, propeller shafts, door hinges and steering yokes.

The company runs six manufacturing facilities. Four are in Ludhiana, Punjab and two are in Hosur, Tamil Nadu. Installed capacity was 40,100 MTPA in FY2025. The company reports one segment only, forged and machined components.

Customers include TVS Motor Company Limited, Honda Motorcycle and Scooter India Private Limited and Mahindra and Mahindra Limited. The automotive industry gave 98.91% of revenue in FY2025 on the company's own KPI table, and non-automotive sectors such as farm equipment and mining equipment gave 1.09%. Domestic sales were 94.59% of revenue and exports were 5.41% in FY2025. Export markets include Hungary, France, Germany, Sweden and the USA.

The promoters are Gopal Krishan Kothari, the Chairman and Managing Director, and Amit Kothari, the Executive Director. Gopal Krishan Kothari has over 40 years of experience in the automotive sector with the company. Amit Kothari has over 29 years.

The industry

The CARE report puts the global automotive forging market at USD 45.1 billion in 2025, growing at a CAGR of 7-9% to USD 65.8 billion by 2030. The Indian automotive forging market was USD 2.6 billion in FY25 and is projected to reach USD 4.1 billion by FY30, at a CAGR of 6-8%. The Indian automotive machining market grew from USD 3.4 billion in FY20 to USD 4.4 billion in FY25 and is projected to reach USD 6.1 billion by FY30. India's forging clusters are mainly in Maharashtra, Tamil Nadu and Punjab.

Customer concentration: Top 5 customers gave 83.37% of revenue from sale of products in FY2025 (83.11% in FY2024).