FIIs Bought 26,82,759 Shares: Forging Company Enters into MoU with Swan Energy Ltd for Supply of Products to Defence Aerospace, Railways & Nuclear Industries

The stock gave multibagger returns of 385 per cent from its 52-week low is Rs 154.55 per share.

On Thursday, shares of Balu Forge Industries Ltd (BFIL) jumped 4.72 per cent to Rs 749.65 per share from its previous closing of Rs 715.85 per share. The stock gave multibagger returns of 385 per cent from its 52-week low is Rs 154.55 per share.  

The company announced that a Memorandum of Understanding (MOU) is entered into between Balu Forge Industries Limited (BFIL) and Swan Energy Limited (SEL) to establish a Special Purpose Vehicle ("SPV") for the purpose of exploring and capitalizing on business opportunities in the Global Defence Industry, specifically in the areas of Aerospace, Railways, and Nuclear. The SPV will focus on identifying and acquiring target entities, such as Esbe Heavy Industries Private Limited, which possess relevant expertise and capabilities. The acquisition of such entities will enable the SPV to expand its product and service offerings, enhance its market position, and drive growth and profitability. BFIL and SEL will contribute to the SPV's initial share capital, with each party holding a 40 per cent stake. The remaining 20 per cent will be held by other strategic investors. The SPV will operate independently, but will benefit from the strategic guidance and support of both BFIL and SEL.

About the Company

Balu Forge Industries Ltd (BFIL) was incorporated in 1989 and is manufacturing fully finished and semi-finished Forged Components. It has the capacity to manufacture components conforming to both New Emission Regulations & the New Energy Vehicles. The company has a fully integrated forging & machining production infrastructure with a large product portfolio ranging from 1 kg to 1,000 kg. The Company has 80+ global distribution networks and operates through both domestic and export segments. The company also caters to the defence, oil & gas, railway and marine amongst other industries.

According to the shareholding pattern, Ashish Kacholia owns 19,90,500 shares or a 1.82 per cent stake in the company and his investment firm Bengal Finance & Investment Pvt Ltd owns 19,03,400 shares or 1.74 per cent stake in the company as of September 2024. Therefore, in just 1 day, Ashish Kacholia in total gains Rs 22,03,94,740 in just 1 day [(19,90,500 shares + 19,03,400 shares) x Rs 57.25 per share gain today]

According to Quarterly Results, the net sales increased by 60.1 per cent to Rs 222.88 crore; EBITDA increased by 116.5 to Rs 65.22 crore and net profit skyrocketed by 106.9 per cent to Rs 48.14 crore in Q2FY25 compared to Q2FY24. Looking at its half-yearly results, the net sales increased by 58.3 per cent to Rs 398.2 crore; EBITDA increased by 108.4 to Rs 108.43 crore and net profit skyrocketed by 105.6 per cent to Rs 82.28 crore in H1FY25 compared to H1FY24. In its annual results, the net sales increased by 14.2 per cent to Rs 326.64 crore and net profit increased by 30.4 per cent to Rs 38.91 crore in FY24 compared to FY23.

In September 2024, FIIs bought 26,82,759 shares and increased their stake to 10.43 per cent compared to 8.51 per cent in June 2024. The company has a market capitalization of over Rs 8,000 crore and the shares of the company have an ROE of 26 per cent & an ROCE of 31 per cent. The stock gave multibagger returns of 215 per cent in just 1 year and a whopping 1,115 per cent in 2 years. Investors should keep an eye on this Small-Cap stock.

Disclaimer: The article is for informational purposes only and not investment advice.