27-Dec-2023
2 mins read
Happy Forgings Ltd, a prominent heavy forgings producer, had a remarkable debut in the stock market, opening with an 18% increase on December 27. This strong beginning followed its initial public offering (IPO), which saw an overwhelming subscription rate of 82 times the previous week. The company’s stock-initiated trading at Rs 1,001.25, with an intraday peak of 17.8 per cent.
Stock Performance and IPO Details
During its debut day, by 10 AM, Happy Forgings’ shares had escalated to Rs 1,004 on the BSE, achieving an 18.2% uplift from its initial price of Rs 850 per share. The company’s IPO, set at Rs 1,009 crore, was open for subscription from the 19th to the 21st of December. It witnessed overwhelming demand from various investor categories, such as retail investors, high net-worth individuals, and qualified institutional buyers, with the number of subscriptions greatly surpassing the shares offered.
Company Background and Clientele
Based in Punjab, Happy Forgings serves various sectors, including automotive and railways, and caters to domestic and international Original Equipment Manufacturers (OEMs). Its client list boasts prominent names like AAM India, Ashok Leyland, and Mahindra & Mahindra.
Utilisation of IPO Proceeds
The company intends to allocate the funds from the IPO to acquire new equipment (Rs 171.1 crore) and repay debts (Rs 152.76 crore). The remaining amount will be used for general corporate purposes.
Financial Growth and Current Challenges
In the fiscal year 2023, Happy Forgings experienced substantial growth with a net profit increase of 46.7%, EBITDA growth of 47.7%, and a revenue rise of over 39%. However, the first half of FY24 witnessed a dip in performance, with net profit growing only by 2.5% due to rising costs. This also affected the EBITDA margin, which fell to 29%, although revenue still saw a 12.2% increase to Rs 673 crore.