- SEBI approved IPOs for Polite Powertech Ltd and Kay Jay Forgings Ltd last week
- Polite Powertech's IPO includes 1.25 crore shares with fresh issue and offer for sale
- Polite Powertech faces risks like revenue dependency, Gujarat concentration, and receivables
The Securities and Exchange board of India greenlit initial public offerings of two companies in the past week, namely Polite Powertech Ltd. and Kay Jay Forgings Ltd.
The market regulator issued its 'observation letter' to the draft documents of the IPOs, which means final approval in SEBI parlance.
Polite Powertech IPO: Size, Key Risks, Other Details
Polite Powertech received SEBI approval for its IPO on Friday, July 31, 2026 after having submitted its draft red herring prospectus bach in March.
The IPO is a mixed bookbuild issue of 1.25 crore equity shares, consisting a fresh issue of up to 1 crore shares and an offer for sale (OFS) segment of up to 25 lakh shares. The stock will be listed on both NSE and BSE.
Arihant Capital Markets Ltd. is the book running lead manager and Kfin Technologies Ltd. is the registrar of the issue. Key details like IPO dates, IPO price bands and lot size are yet to be announced.
Some of the top internal risks that investors should be aware of before participating in the fund raise include:
Heavy revenue dependency on winning deal contract through competitive bidding: Failure to qualify, bid competitively or win such contracts may materially and adversely affect the co's business, financial condition, results of operations, cash flows and growth prospects.
Concentration of business in the state of Gujarat: Any adverse economic, political, regulatory or infrastructural developments in Gujarat may materially and adversely affect their business, financial condition, results of operations and growth prospects.
Working Capital Intensive Operations: The firm's business operations are working capital intensive due to the nature of the projects they undertake; these require upfront mobilisation of resources, procurement of equipment and materials, and
incurrence of other operating expenses prior to the receipt of payments from clients. Failure do to so, may lead to higher
funding requirements and disrupt business.
High Concentration of Long-Overdue Trade Receivables: As of September 30, 2025, a significant portion of total trade receivables (Rs. 1,971.23 lakhs out of Rs. 7,055.78 lakhs, or 27.94%) had been outstanding for more than six months from their due dates. Any inability or delay in collecting payments from clients could lead to liquidity constraints and harm overall financial performance.
Kay Jay Forgings IPO: Size, Key Risks, Other Details
Kay Jay Forgings is a Book Build Issue of Rs 360 crore consisting of a fresh issue of shares worth Rs 300.00 crore and an offer for sale (OFS) of Rs 60.00 crore. Shares will likely list on both exchanges.
PL Capital Markets Pvt.Ltd. is the book running lead manager and Bigshare Services Pvt.Ltd. is the registrar of the issue. Key details like IPO dates, IPO price bands and lot size are yet to be announced.
Some of the top internal risks that investors should be aware of before participating in the fund raise include:
Severe Customer & OEM Concentration Without Long-Term Contracts: KG Forgings relies heavily on a narrow customer base, with its top 10 customers contributing 91.51% of operational revenue for the six months ended September 30, 2025, along with significant dependency on OEM clients.
The company operates without long-term purchase agreements with its buyers. Consequently, any decision by customers to reduce order volumes or switch suppliers could materially and adversely affect business operations and financial health.
Heavy Automotive Sector Dependence & EV Transition Threat: Operations are deeply tied to the automotive industry, which accounted for 93.80% of total revenue from operations in the six-month period ended September 30, 2025. Any cyclical downturn or regulatory shift in the auto sector directly impacts sales volumes.
A substantial portion of revenue is derived from internal combustion engine (ICE) components like crankshafts and crankshaft assemblies. The broader industry transition toward Electric Vehicles (EVs) poses a long-term structural threat to demand and revenue growth.
High Raw Material Exposure, Price Volatility & Lack of Supply Contracts: Raw materials—primarily steel—and components consumed by the company accounted for 52.61% of total operational revenue in the six months ended September 30, 2025. KG Forgings procures a significant portion of its raw materials without long-term binding supply agreements. This leaves the company exposed to supply chain disruptions, steel price volatility, and potential margin erosion if it cannot pass price increases on to customers or improve operational efficiency.
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