Shares of Ramkrishna Forgings Ltd fell as much as 12% in opening trade on Monday to hit their 52-week low after the auto component maker found discrepancies in its inventory following an audit.

As per the internal estimates, a likely adverse impact of the order of 4% to 5% of the net worth of the company is indicated, the company said in a regulatory filing on Saturday.

Reacting to the development, shares of Ramkrishna Forgings dropped 11.78% to a 52-week low of ₹579 on the BSE.

“During the course of Annual Physical Verification of Inventory undertaken by the company for the Financial Year ended 31 March, 2025, which commenced from 6 April, 2025, it was observed that there have been discrepancies in certain cases of inventory,” the auto parts maker said.

“The decision to make the aforesaid appointment has been taken by the Audit Committee in the interest of ensuring transparency, accountability and adherence to the highest standards of Corporate Governance and to mitigate future recurrence of such nature,” it added.

“On the basis of the final joint report by the independent external agencies, the company will appropriately account the impact in its financial statements on a one-time basis,” said Ramkrishna Forgings.

“The Promoters of the Company understanding the potential adverse impact that may arise pursuant to the fact-finding study, on the Net Worth of the Company, stands firmly committed to protect and preserve the stakeholders’ interest to uphold highest standards of Corporate Governance. It was further noted this is a first ever incident of its kind in the history of the Company,” the Kolkata-based company said.

“Further, in order to mitigate the potential adverse impact assessed upon conclusion of the factfinding study, the Promoters are giving an assurance to the investors that they intend to fund the same through permissible instruments as permitted under applicable laws,” it said.

The forging company supplies products to multiple industries including automotive, railways, farm equipment, oil & gas, power and mining among others. Among carmakers, it caters to original equipment makers like Tata Motors, Ashok Leyland and VE Commercial Vehicles in the domestic market. It also supplies components to Volvo and Ford in overseas markets. The company has plants in Jamshedpur, Jharkhand, Dugni at Saraikela, and Liluah, West Bengal, among others.

Ramkrishna Forgings last year said it plans to diversify further in the electric vehicle segment inorganically.