The public issue of Happy Forgings saw a decent Day 1 as it was subscribed 2.32 times, with both small and wealthy retail investors subscribing to the issue. Priced in a band of ₹808–850, the IPO received bids for 1.94 crore shares, against 89.65 lakh shares on offer.
About the offer
The issue from the Ludhiana-based company closes on Thursday. The market lot is 17 shares.
The public issue comprises a fresh issue of ₹400 crore and an Offer-for-Sale (OFS) of up to 71.60 lakh shares worth ₹609 crore.
The quota set aside for retail investors received bids for 3.03 times, while that for non-institutions, generally referred to as high networth individuals, was subscribed 3.58 times. QIBs did not show much interest on the opening day.
The issue is being made through the book-building process, wherein not more than 50 per cent will be available for allocation to qualified institutional buyers, not less than 15 per cent to non-institutional bidders, and not less than 35 per cent to retail investors.
Anchor investors
Happy Forgings allotted about 35.60 lakh shares at ₹850 a share to 25 anchor investors, raising ₹303 crore ahead of its initial public offering on Monday .
Global investors such as Fidelity International, Neuberger Berman, Morgan Stanley, Janchor Partners, WhiteOak Capital, Eastbridge Capital and Kotak Offshore participated in the anchor book. As many as 14 mutual funds, including 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, and insurance companies such as SBI Life Insurance, ICICI Prudential Life Insurance, HDFC Life Insurance and Birla Life Insurance also participated.
Issue proceeds
The company proposes to use the proceeds from the fresh issue for the purchase of equipment, plant and machinery, prepayment of all or a portion of certain outstanding borrowings availed of by the company and for general corporate purposes.
About Happy Forgings
Incorporated in July 1979, Happy Forgings manufactures heavy forgings and high-precision machined components.
HFL primarily serves domestic and global original equipment manufacturers of commercial vehicles in the automotive sector. In the non-automotive sector, it caters to manufacturers of farm equipment, off-highway vehicles, and manufacturers of industrial equipment and machinery for oil and gas, power generation, railways and the wind turbine industries.
The company owns and operates three manufacturing facilities, of which two are located at Kanganwal in Ludhiana, Punjab, and one at Dugri in Ludhiana, Punjab. The annual aggregate installed forgings and machining capacity stands at 120,000 mt and 47,200 mt as of September 30, 2023, respectively.
Financial performance
For the six months ended September 30, 2023, the company posted a revenue of ₹672.90 crore and re-stated profit of ₹119.30 crore.
JM Financial Ltd, Axis Capital Ltd, Equirus Capital Private Ltd and Motilal Oswal Investment Advisors Ltd are the book-running lead managers, and Link Intime India Pvt Ltd the registrar to the offer.
The equity shares are proposed to be listed on the BSE and NSE.