Happy Forging Limited is launching its IPO. The offer opens for subscription on December 19, 2023, and will close on December 21, 2023.
What does Happy Forging Limited do?
Incorporated in July 1979, it specializes in the design and manufacture of heavy forgings and high-precision machined components.
The company’s product portfolio includes a range of items including crankshafts, front axle carriers, steering knuckles, differential housings, transmission parts, pinion shafts, suspension products, and valve bodies.
The company has a customer base that spans both domestic and international markets, including countries such as Brazil, Italy, Japan, Spain, Sweden, Thailand, Turkey, the United Kingdom, and the United States of America.
It operates three manufacturing facilities in Ludhiana, Punjab. In September 2023, the company installed 10 robots across its manufacturing units, demonstrating a significant investment in automation and technology.
What is the issue size of the Happy Forging Limited IPO?
The company’s public offering includes a fresh issue of equity shares totaling ₹400 crore and an Offer for Sale (OFS) of shares valued at ₹608 crore, bringing the total issue size to ₹1,008 crore.
Financials of Happy Forging Limited IPO
| Financial Year | Total Assets (₹ crores) | Total Revenue (₹ crores) | Profit After Tax (₹ crores) | EPS | EBITDA (₹ crores) |
|---|---|---|---|---|---|
| March 31, 2021 | 876.38 | 590.81 | 86.4 | 9.66 | 158.74 |
| March 31, 2022 | 1,129.86 | 866.10 | 142.3 | 15.90 | 230.88 |
| March 31, 2023 | 1,326.16 | 1,202.27 | 208.7 | 23.32 | 340.94 |
| September 30, 2022 | 1,285.80 | 601.99 | 116.39 | 13.01 | 181.86 |
| September 30, 2023 | 1,489.79 | 675.73 | 119.29 | 13.33 | 195.21 |
Risk factors to consider:
Customer Dependence: The company’s heavy reliance on its top 10 customers poses a risk, as losing any could significantly impact revenue and stability.
Raw Material Supply: Dependency on a few steel suppliers without fixed agreements, posing risks of supply disruptions and increased operational costs.
Financial Liabilities: Significant debt with stringent repayment terms; non-compliance could lead to financial constraints and impact business growth.
Industry-Specific Risk: The business is tied to commercial vehicle, farm equipment, and off-highway vehicle industries, any downturns in these sectors could reduce demand and affect financials.
Credit Risk: Exposure to delayed payments or defaults from counterparties, potentially leading to cash flow issues and financial instability.
Export Market Exposure: A significant portion of the company’s revenue is derived from international markets. Any adverse events in foreign markets could disrupt sales and impact revenue streams.
Manufacturing Risks: Operational risks in manufacturing facilities, including potential shutdowns, could reduce sales and adversely affect business health.
Exchange Rate Fluctuations: Any fluctuations in currency values could lead to financial losses and affect the company’s cash flow and profitability.
Equipment Investment: Uncertainties in timely, cost-effective acquisition of new equipment, impacting operational efficiency and growth plans.
Government Incentive Reliance: Reliance on government schemes for operational benefits; non-compliance or cancellation could adversely affect business operations.
Schedule/Timeline of Happy Forging Limited IPO
| Issue Period | December 19, 2023, to December 21rd, 2023 |
|---|---|
| Price band | ₹ 808 -850 |
| Minimum Bid quantity | 17 & Multiples thereof |
| Deadline for accepting UPI mandate | 5:00 PM on the issue Closing Date. |
| Finalization of Allotment | December 22, 2023 - Friday |
| Initiation of Refunds | December 26, 2023 - Tuesday |
| Credit of Shares | December 26, 2023 - Tuesday |
| Date of Listing | December 27, 2023 - Wednesday |
| Mandate end date | January 5, 2023 - Friday |
| Anchor Investors Lock-In End Date | |
| (50% of the Investment) | January 22, 2024 - Monday |
| Anchor Investors Lock-In End Date | |
| (Remaining of the Investment) | March 21, 2024 - Thursday |
How to apply for the Happy Forging Limited IPO?
You can apply for Happy Forging Limited Limited using any supported UPI app by following two steps:
-
Enter your bid on Kite
-
Accept the UPI mandate on your phone
On acceptance of the mandate, the bid amount will get blocked in your bank account. Click here to learn more.
How to check the allotment status of the Happy Forging Limited IPO?
You can check the allotment status for Happy Forging Limited Limited IPO on the website of the Registrar and Transfer Agent. Alternatively, you can also check the allotment status on the NSE website.