Happy Forgings IPO: Issue to Opens on Dec 19, Know Details About the Company
Happy Forgings IPO
Happy Forgings IPO: Unveiling the Forging Future on December 19
Happy Forgings, a leading player in the forging industry based in Punjab, is poised to open its doors to the public through an Initial Public Offering (IPO) scheduled to commence on December 19.
As anticipation builds, investors are eager to delve into the intricate details surrounding this IPO, aiming to decipher the potential it holds in the ever-evolving market.
IPO Details and Schedule
The IPO, a critical milestone for Happy Forgings, will kick off on December 19 with the subscription period expected to last for a few days.
The price band for the shares is yet to be unveiled, keeping investors on the edge of their seats. Before the public gets a chance, the IPO will open its doors on December 18 for anchor investors, providing an exclusive window for strategic investors to participate.
Closing the IPO subscription on December 21, Happy Forgings aims to raise fresh equity capital of Rs 400 crore. In addition to the new equity shares, existing shareholders are offering 71.6 lakh equity shares under the Offer for Sale (OFS).
The breakdown of the OFS includes 49.2 lakh equity shares to be sold by promoter Paritosh Kumar Garg (HUF) and the remaining 22.4 lakh shares by Investor India Business Excellence Fund – III.
Currently, the promoters maintain an 88.24% stake in the company, with the remaining shares held by Investor India Business Excellence Fund – III.
Utilization of IPO Funds
Understanding the purpose behind the capital raised is crucial for investors evaluating the IPO. Happy Forgings plans to allocate Rs 171.1 crore of the funds towards the purchase of equipment, plant, and machinery, signaling a strategic move to enhance its manufacturing capabilities.
A significant portion, Rs 152.76 crore, will be earmarked for the repayment of loans, demonstrating the company’s commitment to fortifying its financial position.
The residual funds will be directed towards general corporate purposes, reflecting a holistic approach to strengthening various facets of the business.
As of October 2023, the company’s outstanding borrowings stand at Rs 259.94 crore, making the planned debt repayment a key component of the IPO strategy.
Allocation Breakdown and IPO Timeline
The IPO allocation is designed to accommodate different categories of investors. Half of the public issue size is reserved for qualified institutional buyers (QIBs), highlighting the company’s efforts to attract institutional investors.
High net worth individuals (HNIs) have a 15% share reserved for them, while retail investors can tap into the remaining 35% of the IPO.
The IPO schedule indicates that successful investors may expect the allotment of shares by December 22, with the shares credited to their demat accounts by December 26.
Trading on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) is set to commence from December 27, marking a crucial juncture for Happy Forgings and its investors.
Merchant Bankers and IPO Advisors
The success of an IPO is often intertwined with the expertise and guidance of the appointed merchant bankers. In the case of Happy Forgings, the esteemed lineup includes JM Financial, Axis Capital, Equirus Capital, and Motilal Oswal Investment
Advisors. Their collective experience and strategic insights are expected to play a pivotal role in ensuring a smooth and successful IPO process.
About Happy Forgings: Navigating the Forging Landscape
Happy Forgings, based in Punjab, is a stalwart in the forging industry. The company has positioned itself as a trusted partner for both domestic and global original equipment manufacturers (OEMs) across diverse sectors, including automotive, off-highway vehicles, oil and gas, power generation, railways, and wind turbine industries.
The client portfolio boasts illustrious names such as AAM India Manufacturing Corporation, Ashok Leyland, Bonfglioli Transmission, International Tractors, JCB India, Mahindra & Mahindra, Meritor Heavy Vehicle Systems Camry S.p.A., SML Isuzu, Swaraj Engines, Tata Cummins, Watson & Challin India, and Yanmar Engine Manufacturing India.
This impressive roster underscores Happy Forgings’ integral role in supplying critical components to renowned industry players.
Financial Performance: A Glimpse into Happy Forgings’ Fiscal Landscape
Analyzing the financial health of a company is pivotal for potential investors. Happy Forgings has showcased commendable performance, with the net profit experiencing a substantial 46.7% year-on-year increase to Rs 208.7 crore in the fiscal year ending March 2023.
This robust growth was mirrored in the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), which surged by 47.7% to Rs 341 crore.
During the same period, the margins expanded to 28.5%, underlining the company’s operational efficiency.
However, the narrative takes a slightly different turn in the current financial year. The six months ending September 2023 witnessed a modest 2.5% year-on-year increase in profit, reaching Rs 119.3 crore.
This apparent deceleration is attributed to a combination of factors, including a decline in EBITDA margins, heightened input costs, and an increase in inventory.
Concurrently, expenses related to employees, finance, and other operational facets have witnessed a notable uptick.
Final Thoughts: Navigating Challenges, Forging Ahead
Happy Forgings’ journey to the IPO is a testament to its resilience and commitment to growth. The forging landscape is marked by challenges, yet the company’s ability to secure a significant market share and maintain strong relationships with industry leaders speaks volumes about its standing in the market.
Investors eyeing the Happy Forgings IPO should carefully weigh the company’s historical performance, future growth prospects, and the potential impact of market dynamics on its operations.
As the IPO unfolds, the financial markets will keenly observe how the company harnesses the raised capital to fortify its position in the forging industry, making it an exciting chapter in the corporate journey of Happy Forgings.
