Happy Forgings IPO: From issue date to price band, here’s all you need to know

Happy Forgings, which is a Punjab-based precision machined components manufacturer, is all set to launch its initial public offering (IPO). The public issue will open for subscription on December 19 and will close on December 21.

The company is yet to announce their price band in the next few days. The anchor book of the offer will open on December 18.

The Happy Forgings IPO comprises a combination of a fresh issue, totaling ₹400 crore in shares, and an offer-for-sale involving 71.6 lakh equity shares from existing shareholders.

Within this offering, Promoter Paritosh Kumar Garg (HUF) intends to divest 49.2 lakh equity shares, while the remaining 22.4 lakh shares will be offered for sale by the investor India Business Excellence Fund – III.

As of now, the promoters maintain an 88.24 percent shareholding in the company, with the remaining shares held by the investor India Business Excellence Fund – III.

The company predominantly serves domestic and international original equipment manufacturers across various sectors including automotive, off-highway vehicles, oil and gas, power generation, railways, and wind turbine industries, intends to utilize the net proceeds from the fresh issue for specific purposes. This includes acquiring equipment, plant, and machinery, with an estimated cost of ₹171.1 crore, as well as clearing debts totaling ₹152.76 crore. The balance of the funds will be allocated towards general corporate purposes.

As of October 2023, the company's total outstanding borrowings amounted to ₹259.94 crore.

Happy Forgings has allocated half of its public issue size for qualified institutional buyers. Additionally, 15 percent of the offering is earmarked for high-net-worth individuals, with the remaining 35 percent designated for retail investors.

Specializing in the manufacturing of heavy forged and machined products such as crankshafts, front axle beams, steering knuckles, differential cases, transmission parts, pinion shafts, suspension products, and valve bodies across various industries, the company derives approximately 44 percent of its business from the automotive segment. The remaining 56 percent is contributed by non-automotive sectors.

JM Financial, Axis Capital, Equirus Capital, and Motilal Oswal Investment Advisors are the merchant bankers to the issue.

The company, in coordination with the NSE, is set to conclude the basis of IPO share allotment by December 22. Successful investors can expect the receipt of equity shares in their demat accounts by December 26. Trading in its equity shares on both the BSE and NSE is scheduled to commence from December 27.

The company has reported a remarkable 46.7% year-on-year surge in net profit, amounting to ₹208.7 crore for the fiscal year ending in March FY23. Additionally, EBITDA (earnings before interest, tax, depreciation, and amortization) experienced a robust growth of 47.7%, reaching ₹341 crore, while the margin expanded by 170 basis points to 28.5% over the corresponding period.