The Happy Forgings IPO, which started its subscription on December 19, is concluding its final day for bidding today. Investors looking to participate in the inaugural offering need to submit their applications by 5 PM on Thursday, December 21.
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On the final day of bidding, December 21, the Happy Forgings IPO garnered a subscription rate of 9.11 times. The public issue received bids for 7.61 crore equity shares, surpassing the 83.65 lakh shares available on offer, as per NSE data available till 10:35 AM.
Happy Forgings IPO Price Band
The price range for the Happy Forgings IPO is set at Rs 808-850. To qualify for allotment, interested bidders need to apply for a minimum of 17 shares. With the lower price band set at Rs 808, the minimum investment for subscribing to this IPO amounts to Rs 14,450.
Happy Forgings IPO GMP Today
As of today, the Grey Market Premium (GMP) for the Happy Forgings IPO stands at Rs 435.
Happy Forgings IPO Allotment DateThe finalisation of the Happy Forgings IPO allotment is anticipated on December 22. Applicants can verify their application status through the online portal of BSE. Additionally, it is anticipated that Happy Forgings shares will commence trading on the stock exchanges on December 27.
Happy Forgings IPO proceeds
The company plans to use the net proceeds for acquiring equipment, plant and machinery, prepayment of debt, and other general corporate purposes.
Happy Forgings book-running lead managersJM Financial, Axis Capital, Motilal Oswal Investment Advisors, and Equirus Capital are serving as the book-running lead managers for the issue.
Before considering an investment in the Happy Forgings IPO, it’s crucial for investors to familiarise themselves with all aspects of the company, including about the company, its financials, IPO review and the risk factors outlined in the Red Herring Prospectus (RHP).
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About Happy Forgings’ Business
The company specialises in the manufacturing of intricate and safety-critical heavy forged components, as well as high-precision machined components. Happy Forgings primarily serves both domestic and international original equipment manufacturers (OEMs) within the automotive sector, focusing on the production of commercial vehicles. Additionally, in the non-automotive sector, it caters to manufacturers involved in the production of farm equipment, off-highway vehicles, industrial equipment, and machinery for various sectors such as oil and gas, power generation, railways, and wind turbine industries. The company boasts a diverse portfolio of heavy forged and machined products, including crankshafts, front axle beams, steering knuckles, differential cases, transmission parts, pinion shafts, suspension products, and valve bodies.
Happy Forgings Financials
In the six months leading up to September 2023, the company generated revenues of Rs 600 crore, with a corresponding profit of Rs 116 crore. For the entire fiscal year of 2023, revenues witnessed a 39% increase, reaching Rs 1196 crore, while profits experienced a substantial 47% surge, reaching Rs 209 crore.
Happy Forgings IPO review
Analysts suggest that the IPO presents a valuable opportunity for investors looking to gain exposure to the manufacturing sector. The company’s commendable track record and promising future outlook further enhance the appeal of investing in this offering.
“On the valuation front, we believe that the company is fairly priced. Thus, we recommend a subscribe for long-term rating to the IPO,” said Anand Rathi.
“We recommend subscribing to the IPO, given the long-term opportunities in global forgings and machining, expansion of exports, and strong financials,” said Incred Equities.
Happy Forgings IPO: Key risk factors
Happy Forgings Ltd relies heavily on its top 10 customers, who contribute significantly to the company’s revenue. The potential loss of any of these key clients poses a risk to the overall business and financial stability of the company.
The company is reliant on a limited number of suppliers for the procurement of steel, its primary raw material. Additionally, the absence of definitive supply agreements with these suppliers leaves the company vulnerable to disruptions in the supply chain, particularly regarding steel. Any interruptions in the steel supply could negatively impact the company’s operations.
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The performance of Happy Forgings is closely tied to specific industries, especially commercial vehicles, farm equipment, and off-highway vehicles, both domestically and internationally. Adverse changes in the conditions affecting these industries pose a significant risk to the company’s business.
A substantial portion of Happy Forgings’ revenue comes from the sale of crankshafts. Consequently, a reduction in demand for crankshafts could lead to a loss of sales, impacting the company’s financial condition.
