Business Profile of the Belrise Industries Limited
Belrise industries is an Indian automotive component manufacturing company which offers a diverse range of safety critical systems and engineering solutions for various vehicle types. Their product portfolio includes metal chassis systems, polymer components, suspension systems, body-in-white components, and exhaust systems. The vehicles include two-wheelers, three-wheelers, four-wheelers, commercial vehicles, and agri-vehicles.
The company specializes in precision sheet metal pressing and fabrication, with a market share of 24% in the overall two-wheeler metal components segment in India. The company has expanded its operational capabilities to include precision sheet metal pressing and fabrication, polymer component manufacturing, suspension system design and production, and coating and painting services.
The company markets its products both domestically and internationally. They work closely with customers to design, engineer, and manufacture products tailored to their specific needs, enhancing their products with evolving trends and technologies. As of June 30, 2024, the company has 15 manufacturing facilities across nine cities in eight states, processing over 60,000 tons of steel annually. They also engage in overseas trading, focusing on commodities like metals, lithium-ion batteries, and electronics.
Belrise Industries Limited IPO Objective
As per the draft red hearing prospects, the IPO issue consists only of offer for sale.
- Belrise Industries IPO offer only has fresh issue of Rs. 21, 500 million. As per DRHP document, the company aims to utilize IPO proceedings towards payment of certain borrowings and general corporate purposes.
| Particulars | Amount to be funded from Net Proceeds |
| Payment of certain outstanding borrowings availed by company | 16180.71 |
| General corporate purposes | XXXX |
| Total | XXXX |
(₹ Million)
IPO Details of Belrise Industries Limited:
| IPO Open Date | N.A. |
| IPO Close Date | N.A. |
| Basis of Allotment | N.A. |
| Listing Date | N.A. |
| Face Value | ₹5 per share |
| Price | N.A. |
| Lot Size | N.A. |
| Total Issue Size | XXXX Equity shares |
| Aggregating up to ₹ 21,500.00 million | |
| Fresh Issue | XXXX Equity shares |
| Aggregating up to ₹ 21,500.00 million | |
| Offer For Sale | NIL |
| NIL | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not more than 50% of the Net Issue |
| Retail Shares Offered | Not less than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15% of the Net Issue |
Issue Price & Size: Belrise Industries Limited IPO
The issue price of Belrise Industries Limited hasn’t been released yet. Upon releasing the dates, the investors can bid between those price ranges. The company only has fresh issue of Rs. 2150 crores.
Launch Date of Belrise Industries Limited IPO
The IPO opening date of Belrise Industries hasn’t been officially announced yet, upon the declaration of dates investor can bid for IPO.
Belrise Industries Limited Financial Statements
| Particulars | For period ended June 30, 2024 | FY24 | FY23 | FY22 |
| INCOME | ||||
| Revenue from operations | 17809.71 | 74842.41 | 64824.96 | 53968.54 |
| Other income | 110.02 | 714.33 | 382.87 | 138.27 |
| Total Income | 17919.73 | 75556.73 | 66207.83 | 54106.8 |
| EXPENSES | ||||
| Cost of materials consumed | 10852.35 | 46849.86 | 41540.73 | 37621.51 |
| Change In Inventories | -268.14 | 600.55 | -504.01 | -168.35 |
| Purchase of Stock-in-trade | 3580.85 | 12829.98 | 11493.99 | 4742.86 |
| Employee benefits expense | 705.72 | 2749.82 | 2358.62 | 2234.25 |
| Finance costs | 789.58 | 2902.42 | 2503.38 | 2156.49 |
| Depreciation and amortisation expense | 829.18 | 3213.54 | 3067.38 | 2456.84 |
| Other expenses | 537.93 | 2567.58 | 2180.69 | 1990.76 |
| Total Expenses | 17027.48 | 71713.75 | 62640.79 | 51034.36 |
| Profit / (Loss) before tax | 892.25 | 3720.39 | 3567.04 | 3072.44 |
| Profit/(Loss) for the period | 715.79 | 3108.79 | 3136.63 | 2618.47 |
| Particulars | For 3-mon period ended June 30, 2024 | FY24 | FY23 | FY22 |
| Revenue from Operations | 17809.71 | 74842.41 | 65824.96 | 53968.54 |
| Revenue Growth (%) | N.A. | 13.70% | 21.97% | 25.54% |
| EBITDA | 2407.02 | 9383.63 | 8976.57 | 7634.78 |
| EBITDA Margin (%) | 13.52% | 12.54% | 13.64% | 14.15% |
| Profit After Tax | 715.79 | 3108.79 | 3136.63 | 2618.47 |
| Profit After Tax Margin (%) | 4.02% | 4.15% | 4.77% | 4.85% |
| RoAE | N.A. | 14.18% | 16.60% | 16.44% |
| RoACE | N.A. | 14.83% | 14.04% | 12.86% |
| Revenue – Vehicle Type-wise | ||||
| 2-Wheeler | 64.50% | 63.30% | 65.48% | 73.18% |
| 3-Wheeler | 2.65% | 2.17% | 2.09% | 2.65% |
| 4-Wheeler (Passenger) | 3.47% | 4.22% | 4.45% | 4.73% |
| 4-Wheeler (Commercial | 5.56% | 5.01% | 5.71% | 4.99% |
| Others | 1.85% | 4.25% | 2.06% | 2.36% |
| Revenue – India & International | ||||
| India | 76.19% | 76.81% | 77.92% | 86.22% |
| International | 23.81% | 23.19% | 22.08% | 13.78% |
| Total No. of Manufacturing Plants | 15 | 15 | 15 | 15 |
Belrise Industries Limited Promoters & Shareholding
As of date, there are three promoters of the company.
The promoter in aggregate collectively holds 90.3% of the paid-up share capital of company.
| Name of the Shareholder | No. of Equity Shares held | % of paid-up Equity capital |
| Promoter | ||
| Shrikant Shankar Badve | 53,00,36,384 | 81.42 |
| Supriya Shrikant Badve | 4,33,33,920 | 6.66 |
| Sumedh Shrikant Badve | 1,45,05,120 | 2.23 |
| Sub-Total | 58,78,75,424 | 90.3 |
| Promoter Group | ||
| Shankar Prabhakar Badve HUF | 20,160 | 0 |
| Swastid Shrikant Badve | 20,16,000 | 0.31 |
| Creative Tools and Press Components Pvt Ltd | 3,83,040 | 0.06 |
| Badve Autocomps Private Limited | 10,88,640 | 0.17 |
| Sumedh Tools Private Limited | 5,83,43,040 | 8.96 |
| Sub-Total | 6,18,50,880 | 9.5 |
| Total | 64,97,26,304 | 99.81 |
Should You Subscribe to Belrise Industries Limited IPO or Not
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Competitive Strengths of Belrise Industries Limited:
Distinguished market leader
Belrise Industries collaborative business model allows them to establish manufacturing facilities near customers' locations. The company's strategic location of warehouse space and ‘just-in-time’ inventory model has enhanced customer loyalty and stickiness. Because of deep understanding of customer requirements, they design, engineer, and manufacture products tailored to their specific needs.
The company holds a 24% market share in India's two-wheeler metal components segment, with a projected growth of 11-13% CAGR through 2030.
Tech-enabled innovation and capabilities
The company has a strong track record in process engineering and technology, ensuring high levels of manufacturing proficiency across its facilities. The company is proactive in integrating new technologies to align with the evolving technological demands of the automotive industry. They have developed capabilities across metal processing, polymer processing, and suspension systems. The company also design, develops, and manufactures suspension components.
Long-standing relationships
The company has established long-standing relationships with global OEMs, offering variety of product used in manufacturing. The company operates a collaborative business model, strategically locating manufacturing facilities near customers to ensure a reliable supply chain. The company has established a position as a key supplier to Bajaj Auto, Honda Motorcycle, Tata Motors, and Jaguar Land Rover Limited. The company has exported over 190 components to their facilities in Austria, Slovakia, and the United Kingdom.
Largely EV-agnostic product portfolio
The company is led by experienced professional management with extensive experience in the automotive industry. The company is committed to innovation and creating new products for electric vehicles to supplement the evolving needs of customer. The company offers a diverse product portfolio, including chassis systems, body-in-white components, polymer components, and suspension systems, which is agnostic to power train types. In 2024, products suitable for both electric vehicles and internal combustion engine applications constituted 74.22% of the company's revenue.
Risk Factors of Belrise Industries Limited:
Facility concentrations
As per recent filing, Belrise Industries had 15 manufacturing facilities, with seven facilities located in Maharashtra. Because of the facility concentration, the facilities are susceptible to regional risks, adverse events, including infrastructure disruptions, workforce disruptions, and state and local government policies. Any future disruption in or around the premises of the facility could negatively impact business operations and companies financials.
Client concentration
The company relies heavily on its ten largest customers, primarily OEMs in the automotive industry, for a significant portion of its revenue. Apart from serving OEM industry, the company also sells to several tier-1 suppliers within and outside India, who sell their products or components containing products to many of its customers. As can be seen from table, their top two customers represent around 30% of their total revenue from operations. Any failure to maintain relationships with its top customers may have an adverse effect on the company's operations and financial condition.
| Customers | % of revenue from operations |
| Customer I | 19.31 |
| Customer II | 11.52 |
| Customer III | 5.1 |
| Creative Tools & Press Components | 4.51 |
| Badve Autocomps Private Limited | 3.23 |
| Sumedh Tools Private Limited | 3.22 |
| Swami Ashirwad Engimech Private Limited | 2.86 |
| Customer VIII | 2.59 |
| Eximiius Autocomps Private Limited | 2.55 |
| Badve Autotech Private Limited | 2.53 |
| Total revenue from ten largest customers | 57.42 |
Capacity utilization
The company's future capacity utilization at its manufacturing facilities may be affected by various factors, including machinery breakdowns, power and water supply interruptions, industrial accidents, etc. Earlier in May 2023, a fire broke at production facility in Aurangabad Facility II, which resulted in the company's inability to utilize this plant. Also, in an event of cancelation or decline in production requirements of order from OEM customers could adversely affect its overall capacity utilization. Under-utilization of manufacturing capacities over extended periods could negatively impact the company's business and results of operations.
Raw material
Belrise dependency on third party for the fulfillment of raw material increases its reliance and susceptibility to fluctuations in raw material prices. As per June quarter filings, the company has over 150 suppliers and raw material contributed to more than 60% of their total expenses and in scenario of raising raw marketable prices, pricing pressure from customers may adversely affect profitability, as it may lead to an erosion of margins while maintaining rigorous quality standards.
If the company couldn’t adjust volatile raw material cost or incapable of passing on the rate hike to customer, or improve its operating efficiencies through new manufacturing processes, its financial condition may be adversely affected.
| Particulars | For 3-mon ended June 30, 2024 | FY24 | FY23 | FY22 |
| Cost of materials consumed | 10852.35 | 46849.86 | 41540.73 | 37621.51 |
| Cost of materials consumed, as a percentage of total expenses (%) | 63.73% | 65.33% | 66.32% | 73.72% |
| Total value of goods purchased from ten largest suppliers by amounts incurred | 6894.59 | 22461.03 | 23730.67 | 23208.77 |
| Total value of goods purchased from ten largest suppliers by amounts incurred, as a percentage of total expenses (%) | 47.88% | 36.99% | 44.40% | 54.90% |
Relocating facility
Belrise Ind. revenue is primarily derived from the sale of automotive components for two-wheeler vehicles. So as to remain competitive, the company establishes manufacturing facilities in close proximity to client. Setting up a facility requires significant capital expenditure, which may be adversely affected by delays in procurement of capital required for operations. Even if the new machinery are not procured, the there could be substantial relocation or shutdown costs for the facility.
The company's competitiveness in the automotive components industry could result in customer loss, which could have an adverse effect on its business operations and financial condition.
Stringent quality standards
Belrise industries serve some of the Industry top clients and they demand products matching their quality standards. The company may have to recall if its products if it fails to meet the stringent quality standards. The company is subject to periodic inspections and audits by regulatory authorities. If the company is not in compliance with the requirements prescribed by these authorities, it may be subject to regulatory actions.
Belrise Industries Limited Grey Market premium
Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies' stocks that start trading even before the launch of the IPO to the date of its listing.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market. There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share
According to various online sources, the Grey Market Premium or GMP of the Belrise Industries Limited is trading around Rs XX in the grey market. It means shares are trading at the upper band issue price of Rs XX with a premium in the grey market and may list around the same price.
