The Initial Public Offering of Happy Forgings Limited was subscribed 7.47 times on the second day of bidding.
The issue received bids of 6,24,63,797 shares against the offered 83,65,639 equity shares, at a price band of ₹808–850, according to the data available on the stock exchanges.
Non-Institutional Investors Portion was subscribed with 16.50 times. Retail Portion was subscribed 7.42 times. Qualified Institutional Buyer Portion was subscribed 0.45 times. The issue kicked off for subscription on Tuesday, December 19, 2023 and will close on Thursday, December21, 2023.
A day prior to the opening of the issue, Happy Forgings Ltd had raised Rs. 303 crores from 25 anchor investors. Foreign investors who participated in the anchor were Fidelity International, Neuberger Berman, Morgan Stanley, Janchor Partners, WhiteOak Capital, EastBridge Capital and Kotak Offshore. Mutual funds like SBI Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund, Nippon India Mutual Fund, Kotak Mahindra Mutual Fund, Aditya Birla Sun Life Mutual Fund, Axis Mutual Fund, DSP Mutual Fund, Edelweiss Mutual Fund, Canara Robeco Mutual Fund, Invesco Mutual Fund, Motilal Oswal Mutual Fund, Quant Mutual Fund and HSBC Mutual Fund along with Insurance companies such as SBI Life Insurance, ICICI Prudential Life Insurance, HDFC Life Insurance and Birla Life Insurance participated in the anchor book as well.
Leading brokerages like Nirmal Bang, Reliance Securities, BP Wealth, Ventura and Geojit have given a “SUBSCRIBE” rating to the issue, given Happy Forgings’ (HFL) strong track record and diversified revenue segments with value added products. The company has long-standing customer relationships across industries and has constantly built capabilities with an emphasis on capital efficiency. Furthermore, HFL has a track record of sustained revenue growth and profitability and it is well positioned to capitalise on potential alternative engine technologies.
JM Financial Limited, Axis Capital Limited, Equirus Capital Private limited and Motilal Oswal Investment Advisors Limited are book running lead managers and Link Intime India Private Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.
Happy Forgings, a vertically integrated company with over 40 years of expertise, is involved in engineering, process design, testing, manufacture, and supply of a range of margin-accretive and value-additive components. The company has emerged as a leading player in the domestic crankshaft manufacturing industry and as per the ‘Industry Report on Global and Indian Forging and Machining Markets’ by Ricardo, HFL has the second largest production capacity for commercial vehicle and high horse-power industrial crankshafts.
Happy Forgings primarily serves domestic and global original equipment manufacturers (“OEMs”) manufacturing commercial vehicles in the automotive sector, while in the non-automotive sector, they cater to manufacturers of farm equipment, off-highway vehicles and manufacturers of industrial equipment and machinery for oil and gas, power generation, railways and wind turbine industries.
The company own and operate three manufacturing facilities, of which two are located at Kanganwal in Ludhiana, Punjab and one is located at Dugri in Ludhiana, Punjab. The annual aggregate installed capacity for forging and machining stands at 120,000.00 MT and 47,200.00 MT as of September 30, 2023, respectively.
HFL has evolved from a forging-led business to a manufacturer of machined components, with a focus on providing margin-enhancing value-added products. The company manufactures a wide range of heavy forged and machined products which include crankshafts, front axle beams, steering knuckles, differential cases, transmission parts, pinion shafts, suspension products and valve bodies across industries for a diversified base of customers.
HFL’s consolidated revenue from operations increased by 39.12% to ₹11,965.30 million in Fiscal 2023 from ₹8,600.46 million in Fiscal 2022. Profit after tax increased by 46.67% from ₹1,422.89 million in fiscal 2022 to ₹2,087.01 million in fiscal 2023. For the six months ended September 30, 2023, standalone revenue from operations stood at ₹6,729.00 million and profit after tax stood at ₹1,192.99 million.
The table below shows subscription data for all the categories of investors: