Happy Forgings Ltd IPO - Review, Valuation, Date & GMP Today

Happy Forgings Limited IPO  - Complete Overview

Established in July 1979, Happy Forgings Limited, a leading Indian manufacturer, specializes in designing and producing heavy forgings and high-precision machined components. As the fourth-largest engineering-led manufacturer in India, the company delivers complex and safety-critical components with a significant forgings capacity.

The company is engaged in vertically integrated operations, they cover engineering, process design, testing, manufacturing, and supply, creating diverse components for various industries globally. Its focus lies in serving original equipment manufacturers (OEMs) in the automotive sector, particularly in commercial vehicle manufacturing, and extends to non-automotive sectors such as farm equipment, off-highway vehicles, and industrial equipment.

The product portfolio includes crankshafts, front axle carriers, steering knuckles, differential housings, transmission parts, pinion shafts, suspension products, and valve bodies, meeting high standards of quality and reliability. The esteemed customer base includes industry leaders worldwide.

Operating from three advanced manufacturing facilities in Ludhiana, Punjab, Happy Forgings Limited has expanded globally, reaching regions such as Brazil, Italy, Japan, Spain, Sweden, Thailand, Turkey, the United Kingdom, and the United States. As of FY 2023, the company has shown significant growth, with operational revenue increasing by an impressive 43.02%, reflecting its commitment to excellence and customer satisfaction.

 

Detailed Video

 

 

Happy Forgings Limited IPO Overview

Happy Forgings Limited IPO date is slated to be open for subscription from December 19, 2023, to December 21, 2023. This BSE, NSE IPO follows a Book Built Issue IPO.

Happy Forgings Limited IPO price is fixed at Rs. 808 to Rs. 850 per share. The upcoming BSE, NSE IPO will be listed on December 27, 2023.

The Fresh issue size of this IPO amounts to Rs. 400.00 CR. Within this total issue, 30% is issued to retail investors, and 15% is issued to other investors.

 

Happy Forgings Limited IPO Timetable (Tentative)

Events	Date
IPO Opening Date	19 December 2023
IPO Closing Date	21 December 2023
IPO Allotment Date	22 December 2023
Refund initiation	26 December 2023
IPO Listing Date	27 December 2023

 

Happy Forgings Limited IPO Details

Happy Forgings Limited's IPO, scheduled from December 19 to December 21, 2023, features a face value of Rs. 2 per share and an issue price ranging from Rs. 808 to Rs. 850 per share.

IPO opening & closing date	19 December to 21 December 2023
Face value	Rs. 2  per Share
Issue Price	Rs. 808 to Rs. 850  per Share
Lot Size	17 Shares
Price of 1 Lot	Rs. 14,450
Total Issue Size	11,865,802 Shares (aggregating up to Rs. 1,008.59 Cr)
Offer for Sale	7,159,920 shares of Rs. 2 (aggregating up to Rs. 608.59 Cr)
Fresh Issue	4,705,882 Shares (aggregating up to Rs. 400.00 Cr)
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Private Ltd

 

 

Happy Forgings Limited IPO Lot Details

Application	Lot	Shares
Minimum Lot Investment (Retail)	1 Lot	17
Maximum Lot Investment (Retail)	13 Lot	221
Minimum Lot Investment (HNI)	14 Lot	238

 

Happy Forgings Limited IPO Reservation

QIB Shares Offered	50%
Retail Shares Offered	35%
Other Shares Offered	15%

 

Company Financial

As of Mar 30, FY 23, Happy Forgings Limited's robust financials include total assets of Rs. 1,326.17 crores, total revenue of Rs. 1,202.27 crores, and a Profit After Tax (PAT) of Rs. 208.70 crores. The company demonstrates a strong net worth of Rs. 988.31 crores, with reserve & surplus at Rs. 978.66 crores, while total borrowings stand at Rs. 218.52 crores.

(Amount in Crore)

Period	Mar 30, FY 23	Mar 30, FY 22
Total Assets	1,326.17	1,129.87
Total Revenue	1,202.27	866.11
PAT	208.70	142.29
Net worth	988.31	787.62
Reserve & Surplus	978.66	769.72
Total Borrowings	218.52	240.35

 

Revenue Distribution Sector-Wise

As of Sep 30, F.Y. 23, Happy Forgings Limited's sector-wise revenue distribution reveals a significant focus on the Automotive Sector, particularly Commercial Vehicles, contributing 40.38%. The Non-Automotive Sector, including Farm Equipment and Industrial, collectively constitutes 59.62% of the total revenue. 

(in %age)

Particulars	Sep 30, F.Y. 23	Mar 31, F.Y. 23	Sep 30, F.Y. 22
Automotive Sector
Commercial Vehicles	40.38%	43.65%	41.74%
Non Automotive Sector
Farm Equipment	58.26%	36.79%	40.07%
Off Highway Vehicles	12.61%	15.86%	15.1
Industrial	13.70%	3.70%	3.04%
Total Non Automotive Sector	59.62%	56.35%	58.26%
Total Revenue	100.00%	100.00%	100.00%

 

Revenue Distribution Geography-Wise

Happy Forgings Limited's diversified revenue distribution across key regions, as of Sep 30, F.Y. 23, includes 13.58% from Sweden, 10.77% from Turkey, and 16.33% from Italy.

(in %age)

Particulars	Sep 30, F.Y. 23	Mar 31, F.Y. 23	Sep 30, F.Y. 22
Sweden	13.58%	25.01%	28.16%
Turkey	10.77%	19.88%	18.72%
Italy	16.33%	18.97%	18.80%

 

Revenue By Operations

Happy Forgings Limited demonstrates substantial growth, with total revenue from operations reaching Rs. 6,757.33 crores in Sep 30, F.Y. 23, compared to Rs. 6,019.91 crores in Sep 30, F.Y. 22, showcasing a positive trend.

(Amount in Crores)

Particulars	Sep 30, F.Y. 23	Mar 31, F.Y. 23	Sep 30, F.Y. 22
Revenue from operations	6,729.00	11,965.30	5,998.00
Other Operating Income	28.33	57.41	21.91
Total Revenue from operations	6,757.33	12,022.71	6,019.91

 

 

The Objective of the Issue

The company intends to use the net proceeds for the following objectives.

• Purchase of equipment, plant and machinery.
• Prepayment of all or a portion of certain outstanding borrowings availed by the Company
• General corporate purposes

 

Promoters and Management of Happy Forgings Limited IPO

1. Paritosh Kumar
2. Ashish Garg
3. Megha Garg

Pre-issue Promoter Shareholding	88.24%
Post-issue Promoter Shareholding	78.60%

 

Happy Forgings Limited IPO Lead Managers

• Jm Financial Limited
• Axis Capital Limited
• Equirus Capital Private Limited
• Motilal Oswal Investment Advisors Limited

 

Peers of Happy Forgings Limited IPO

Happy Forgings Limited outperforms its peers with a robust RoNW of 21.12%, a favorable P/E ratio of 36.45, and higher EPS at Rs. 23.32.

Name of the Company	RoNW (%)	Face Value (Rs. per Share)	P/ E	EPS (Basic) (Rs.)
Happy Forgings Limited	21.12%	2.00	36.45	23.32
Bharat Forge Limited	7.88%	2.00	102.63	11.35
Craftsman Automation Limited	18.04%	5.00	43.92	117.56
Ramkrishna Forgings Limited	18.77%	2.00	49.36	15.52
Sona BLW Precision Forgings Limited	17.26%	10.00	85.56	6.76

 

IPO's Valuations

To evaluate the Happy Forgings Limited IPO's valuation, we can utilise the information presented in the company's  RHP and DRHP. Happy Forgings Limited IPO is fixed at Rs. 808 to Rs.850 per share, with an EPS of Rs.23.32. The company's P/E ratio is calculated at 36.45 based on the issue price.

 

Dividend Policy

From April 1, 2023, the company distributed dividends at Rs. 1.30 per Equity Share, totaling Rs.116.35 million, reflecting a dividend rate of 65.00%. The disbursement occurred through bank transfer with tax deducted at source. Future dividend decisions will be influenced by factors such as earnings, financial health, and cash flows.

 

 

IPO's Strengths

Established Track Record: With a history dating back to July 1979, Happy Forgings Limited has built a strong foundation as a leading Indian manufacturer of heavy forgings and high-precision machined components.

Global Presence: Operating from three advanced manufacturing facilities in Ludhiana, Punjab, the company has successfully expanded its reach to global markets, including Brazil, Italy, Japan, Spain, Sweden, Thailand, Turkey, the United Kingdom, and the United States.

Diverse Product Portfolio: The company's product portfolio includes a wide range of components such as crankshafts, front axle carriers, steering knuckles, and more, catering to both automotive and non-automotive sectors.

Impressive Revenue Growth: As of FY 2023, Happy Forgings Limited has demonstrated significant growth, with operational revenue increasing by an impressive 43.02%.

 

IPO's Weaknesses

Dependency on the Automotive Sector: A significant portion of the company's revenue is derived from the automotive sector, particularly commercial vehicles. Any downturn or challenges in the automotive industry could impact the company's financial performance.

Geographic Concentration: The revenue distribution geography-wise indicates a reliance on specific regions, with notable contributions from Sweden, Turkey, and Italy. Economic or political factors affecting these regions could pose risks.

Borrowings: The company has total borrowings, and the utilization of the IPO proceeds for prepayment of certain borrowings indicates a reliance on external funding.

 

 

IPO GMP Today

The Last GMP (Grey Market Premium) for Happy Forgings Limited IPO was Rs. 235.

 

Conclusion

Happy Forgings Limited presents itself as a well-established player with a diverse product portfolio and a global footprint. The impressive revenue growth reflects positive operational performance. However, potential weaknesses, such as dependence on the automotive sector and geographic concentration, should be considered by investors. The IPO GMP indicates a favorable market reception, but investors should conduct thorough due diligence before making investment decisions.

 

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

Thank You for reading this blog.
Hope you loved the IPO analysis.
Please Comment Below with your feedback because Your feedback motivates us to deliver more such content.

 

Follow MUKUL AGRAWAL for the latest IPO news and reviews. You can connect with us on social media platforms like Twitter, Facebook, and Instagram. You can also subscribe to our YouTube Channel for the latest videos of the stock market.