This kenning suggests that Grendel is a creature from hell and is pure evil.
In Old Norse and Old English poetry, kennings are metaphors in the form of compound words. Here, "hell-forged" is a metaphor for Grendel's devilish nature and origins.
In Beowulf, Grendel is described as a "creature of darkness," a monstrous being rejected by God. According to J.R.R. Tolkien in Beowulf: The Monsters and the Critics (1936), Grendel is "the evil spirits [taking] visible shape."