Balu Forge Industries has announced the successful allotment of 20.60 lakh equity shares through the conversion of convertible warrants, as approved by the Board of Directors. The company issued these shares at ₹360 per share, including a premium of ₹350, raising a total consideration of ₹55.62 crore.

Allotment Details and Pricing Structure

The equity shares carry a face value of ₹10 each and were issued at an all-inclusive price of ₹360 per share. The conversion followed a straightforward 1:1 ratio, where each convertible warrant was exchanged for one fully paid-up equity share.

Investor-wise Distribution

The allotment was distributed between two categories of investors, with the promoter group receiving the majority allocation.

Warrant Conversion Process

The convertible warrants were originally issued on a preferential basis, with investors having paid 25% of the total consideration at the time of warrant allotment. The remaining 75% consideration was collected during the conversion process, completing the equity share issuance.

Regulatory Compliance

The allotment was conducted in accordance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has provided detailed disclosures as required under Schedule III Part A of the SEBI regulations and relevant SEBI circulars.

Corporate Leadership

The allotment was approved and executed under the leadership of Managing Director Jaspalsingh Chandock, who also participated in the conversion as a promoter group member through Jaikaran Jaspalsingh Chandock. The company maintains its registered office at Imperial Palace, Andheri East, Mumbai, and holds multiple ISO certifications including ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018.

Balu Forge Industries Limited has entered into a significant Memorandum of Understanding for the supply of large caliber ammunition shells, marking a strategic expansion in the defence sector with substantial revenue implications. The 5-year agreement, dated February 26, 2026, involves supply from the company's greenfield manufacturing campus in Belgaum, Karnataka, and could potentially generate revenue equivalent to 100% of the company's yearly earnings, representing the next phase following its onboarding onto the NATO supply chain.

Agreement Overview and Strategic Positioning

The MoU aligns with Balu Forge's strategy to build a strong foundation in the defence consumable space, starting with large calibre ammunition and expanding towards medium and small calibre variants in the future. The agreement covers the complete large caliber ammunition category, beginning with 155mm M107, 152mm, and 155mm ERFB/BT variants, with plans to extend to 105mm, 120mm, and 81mm variants.

Product Specifications and Volume Commitments

The agreement encompasses substantial monthly supply commitments across two primary ammunition categories:

The combined monthly volume of 40,000 units exceeds the company's present capacity, though plans are in place to increase production capacity beyond 360,000 units per annum from internal accruals.

Pricing and Revenue Impact

Both ammunition variants are priced uniformly at USD 315 per unit on FOB Nhava Sheva terms. The pricing structure includes indexation to the London Metal Exchange to safeguard interests of both buyer and seller against metal price fluctuations. The agreement's revenue potential could represent 100% of the company's yearly revenue, highlighting its transformational impact on business operations.

Implementation Timeline and Confidentiality

The legally binding agreement commenced on February 25, 2026, with serial supply commencement scheduled from April 2026 in a phased ramp-up manner. Initial supplies will focus on 155mm M107 and 152mm variants, with extended range variants (155mm ERFB BB/BT) to be added as addendum following trials and approval.

The MoU has been signed with a NATO affiliated entity, with the end user's name remaining undisclosed due to the confidential and sensitive nature of defence supplies. This confidentiality aspect underscores the strategic importance of the agreement within the NATO supply chain framework.

Manufacturing Capabilities and Infrastructure

Balu Forge operates from a 46+ acre campus in Belgaum, Karnataka, featuring fully integrated forging and machining capabilities. The facility is equipped with high-capacity hydraulic hammers, forging presses, dedicated in-house tool room, metallurgical labs, and CNC machining units, ensuring consistent precision and quality for defence applications.

The company's comprehensive product portfolio ranges from 1 kg to 1,500 kg components up to 3 meters in length, supporting diverse applications across automotive, aerospace, defence, and other industrial sectors. This diversified manufacturing expertise positions the company well for defence sector expansion beyond ammunition shells.