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IPO screener: Ludhiana-based Happy Forgings issue opens today at ₹808-850

Happy Forgings Ltd will hit the capital market with an issue priced in a band of ₹808–850 on Tuesday. The issue from the Ludhiana-based company will close on Thursday. The minimum bid lot is 17 equity 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 issue is being made through the book-building process, wherein not more than 50 per cent will be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15 per cent to non-institutional bidders and not less than 35 per cent to retail investors.

Happy Forgings raised ₹303 crore from anchor investors, ahead of its initial public offering on Monday. In a notice to the exchanges, it said it had allocated 35,59,740 equity shares at ₹850 a share to 25 anchor investors.

Global investors such as Fidelity International, Neuberger Berman, Morgan Stanley, Janchor Partners, WhiteOak Capital, Eastbridge Capital and Kotak Offshore participated as part of the anchor book. Fourteen 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, along with insurance companies such as SBI Life Insurance, ICICI Prudential Life Insurance, HDFC Life Insurance and Birla Life Insurance also participated in the anchor book.

Utility of funds

The company proposes to use proceeds from the fresh issue for the purchase of equipment, plant and machinery, prepayment of all or a portion of certain outstanding borrowings availed by the company and general corporate purposes.

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 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 capacity for forging and machining stands at 120,000 MT and 47,200 MT as of September 30, 2023, respectively.

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.

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