Unlisted shares of Happy Forgings are currently trading Rs 435 higher in the grey market, which is a 51.18 per cent listing gain from the public issue
Happy Forgings IPO: The initial public offering of auto components maker Happy Forgings is going to be closed on Thursday, December 21. So far, the Rs 1,008.6-crore IPO has received 7.69 times subscription. On the second day of bidding on Wednesday, the IPO garnered bids for 6,38,64,699 shares against 83,06,061 shares on offer.
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The portion for non-institutional investors attracted 16.94 times subscription, while the quota for Retail Individual Investors (RIIs) received 7.87 times subscription. The category for Qualified Institutional Buyers (QIBs) got subscribed 44 per cent.
The IPO was opened on Tuesday, December 19. The price band of the IPO has been fixed at Rs 808-850 a share. For investors, the minimum lot size is 17 shares. The minimum amount of investment required by retail investors is Rs 14,450.
Happy Forgings IPO GMP Today
According to market observers, unlisted shares of Happy Forgings are currently trading Rs 435 higher in the grey market as compared with its issue price. The Rs 435 grey market premium or GMP means the grey market is expecting a 51.18 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Happy Forgings IPO: Should You Subscribe?
Assigning a ‘subscribe for long term’ rating to the IPO, brokerage firm Anand Rathi in its IPO note said, “The company is valuing at P/E of 38.4 times with a market cap of Rs 8,007.4 crore post issue of equity shares and return on net worth of 21.12 per cent. On the valuation front, we believe that the company is fairly priced. It was added with a ‘subscribe for long term’ rating.”
It said Happy Forgings’s diversified product portfolio, coupled with its focus on margin-accretive and value-additive products, has contributed to its transition from a forging-led business to a leading player in the machined components manufacturing industry.
Another brokerage firm StoxBox also gave a ‘subscribe’ rating, saying: “The company emerges as the one-stop solution to cater to such market demand in the automotive and non-automotive segments. On the financial performance front, the company’s revenue, Ebitda and PAT grew at a CAGR of 43 per cent, 46.6 per cent and 55.4 per cent, respectively during the FY 2021-23 period. We recommend a ‘subscribe’ rating for the issue.”
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Happy Forgings IPO Details
The Initial Public Offer (IPO) has a fresh issue of up to Rs 400 crore and an offer for sale of up to 71,59,920 equity shares.
Ahead of the IPO, Happy Forgings Ltd on Monday said it has mobilised Rs 303 crore from anchor investors.
Proceeds from the fresh issue will be utilised towards the purchase of equipment, plants, and machinery, the payment of debt and a portion of the funds will also be used for general corporate purposes. The Ludhiana-based auto component maker’s primary clientele includes domestic and global Original Equipment Manufacturers (OEMs) in the commercial vehicle sector.
It also serves non-automotive markets like farm equipment, off-highway vehicles, and industrial machinery. Ashok Leyland Ltd, JCB India Ltd, Mahindra & Mahindra Ltd, SML ISUZU Ltd, and Tata Cummins are among its customers.
The company has operations in nine countries — Brazil, Italy, Japan, Spain, Sweden, Thailand, Turkiye, the UK, and the US. JM Financial, Axis Capital, Equirus Capital Private and Motilal Oswal Investment Advisors are the managers to the offer.
