In a strategic move that signals consolidation and ambition, Forge Auto International Ltd. has acquired a 100% stake in Forge Mach Auto, a deal that positions the company to expand its footprint in precision engineering and automotive components manufacturing. The acquisition, finalized earlier this week, marks a significant milestone in Forge Auto’s growth trajectory and reflects its commitment to vertical integration and operational synergy.
The announcement comes on the heels of Forge Auto’s successful IPO listing on the NSE SME platform in October 2024, which raised ₹31.10 crore through a fully subscribed book-built issue. With this acquisition, the company aims to strengthen its supply chain, enhance product innovation, and scale up its manufacturing capabilities to meet rising demand across domestic and international markets.
Strategic Fit: Why Forge Mach Auto?
Forge Mach Auto, a privately held firm specializing in high-precision machining and component finishing, has long been a supplier and collaborator with Forge Auto International. The acquisition brings under one roof a complementary set of capabilities that will allow Forge Auto to streamline production, reduce lead times, and improve quality control.
“This acquisition is not just about expanding capacity—it’s about deepening our technological edge,” said a senior executive at Forge Auto. “Forge Mach Auto’s expertise in CNC machining and finishing processes will allow us to deliver more complex, safety-critical components with greater efficiency.”
The move is expected to bolster Forge Auto’s portfolio, which already includes forged and precision-machined parts for commercial vehicles, railway bogies, tractors, agricultural equipment, and industrial tools. Products like short and long forks, flange yokes, ball studs, gear blanks, and stub axle assemblies are now poised to benefit from enhanced machining capabilities.
Growth Momentum Post-IPO
Forge Auto International has been riding a wave of investor confidence since its IPO, which was priced between ₹102 and ₹108 per share. The company reported a revenue jump from ₹134 crore in FY22 to ₹177.64 crore in FY233, reflecting strong demand and operational efficiency.
The acquisition of Forge Mach Auto is expected to be accretive to earnings and will likely contribute to Forge Auto’s bottom line in the upcoming fiscal year. Analysts tracking the SME sector note that Forge Auto’s ROE of 24.1% and ROCE of 22.4% place it among the more efficient players in the auto components space.
Vertical Integration and Operational Synergy
By bringing Forge Mach Auto in-house, Forge Auto International is aiming for tighter control over its production pipeline. This vertical integration strategy is expected to:
-
Reduce dependency on third-party machining vendors
-
Improve turnaround times for custom orders
-
Enhance quality assurance and compliance
-
Lower overall production costs through shared infrastructure
The acquisition also aligns with Forge Auto’s commitment to “Zero Defect, Zero Effect” manufacturing, a government-certified sustainability initiative that emphasizes precision, environmental responsibility, and customer satisfaction.
Market Outlook and Industry Trends
India’s auto components industry has seen robust growth, with revenues reaching ₹5.6 lakh crore in FY23—a 32.8% increase over the previous year. Domestic OEM demand contributed 66% of this, followed by aftermarket and exports. Forge Auto’s expansion comes at a time when the sector is pivoting toward electrification, lightweight materials, and advanced safety systems.
With the acquisition, Forge Auto is better positioned to serve OEMs looking for integrated solutions and faster prototyping cycles. The company is also exploring export opportunities in Southeast Asia and Europe, where demand for precision-forged components is rising.
What’s Next?
Forge Auto International plans to invest in upgrading Forge Mach Auto’s facilities, including the addition of automated inspection systems and advanced tooling. The integration process is expected to be completed by Q1 FY26, with joint operations commencing immediately.
“We’re building a future-ready manufacturing ecosystem,” said the company’s Managing Director. “This acquisition is a leap toward that vision.”
Sources: Screener, IPO Watch, Money Control
