Happy Forgings IPO: Forging a Path to Investment?
Happy Forgings Limited, a prominent player in India's crankshaft and heavy forged components manufacturing industry, is poised to enter the public domain through an initial public offering (IPO). This article delves into the intricacies of the Happy Forgings IPO, providing a comprehensive overview for potential investors.
Established in 1983, Happy Forgings has cemented its position as a leading supplier of crankshafts for commercial vehicles, high horse-power industrial crankshafts, and other heavy forged components. The company caters to a diverse clientele, including major automobile manufacturers and industrial equipment producers. Happy Forgings boasts a state-of-the-art manufacturing facility with a strong focus on quality control and operational efficiency.
Happy Forgings has demonstrably consistent growth and profitability. In the first six months of fiscal year 2024 (till September 2023), the company recorded a net profit of ₹116 crore on revenue of ₹600 crore, showcasing its financial resilience. The company's order book stood at ₹1,200 crore as of September 2023, reflecting strong future prospects.
The proposed IPO comprises a fresh issue of up to ₹400 crore and an offer for sale (OFS) of up to ₹608.59 crore by promoters and existing shareholders. The IPO opened on December 19, 2023, and closed on December 21, 2023. The price band for the IPO has been set at ₹808 to ₹850 per share.
IPO Opening Date: December 19, 2023
IPO Closing Date: December 21, 2023
Listing Date: December 28, 2023 (Tentative)
Promoter holding (pre and post IPO): 74.84% [pre-IPO holding]% 62.42% [post-IPO holding]%
Lot Size: 18 shares
IPO Price Band: ₹808 to ₹850 per share
Objectives of the Issue:
Happy Forgings intends to utilize the proceeds from the IPO to:
Expand its manufacturing capacity: The company aims to invest a significant portion of the proceeds in expanding its manufacturing capacity to meet the growing demand for its products, particularly in the commercial vehicle and high-horsepower segments.
Repayment of debt: A portion of the proceeds will be used to reduce the company's debt burden, further improving its financial health and stability.
Enhance research and development: Happy Forgings plans to invest in research and development initiatives to develop new products and technologies, staying ahead of the competition.
Upgrade its technology infrastructure: The company plans to modernize its technology infrastructure to improve operational efficiency and product quality.
Grey Market Premium (GMP):
The IPO grey market premium (GMP) for Happy Forgings currently stands around ₹450 per share. This indicates that investors in the grey market are willing to pay ~₹1300 per share for the company's shares, suggesting high investor interest in the IPO.
Happy Forgings' IPO presents an opportunity for investors to gain exposure to a leading player in the growing crankshaft and heavy forged components market. The company's robust financial performance, experienced management team, and focus on expansion and technology upgrades position it well for future growth. However, investors should carefully consider the competitive landscape and overall economic conditions before investing in any IPO.
Disclaimer: All information is provided for educational and informational purposes only. Data is fetched from publicly available sources such as the DRHP filed by the company and other reliable sources. The website or the author takes no guarantee for the accuracy of the data; however, we have tried our best to present accurate data to our readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.