Happy Forgings lists at 18% premium at Rs. 1001 per share on the BSE

Happy Forgings Limited, an Indian manufacturer, engaged in designing and manufacturing heavy forgings and high-precision machined components, debuted on the Indian stock market today.

Upon its debut on the BSE, the stock opened at Rs 1001.25 per share, reflecting an impressive 17.8% premium compared to the final issue price of Rs 850 per share. Meanwhile, on the NSE, the stock debuted at Rs 1000 per share, representing an impressive premium of around 17.65% over its final issue price. The current market capitalisation of the company stands at Rs 9,432.26 crore.

IPO Proceeds 

The Company intends to use the Net Proceeds from the Fresh Issue for the following purposes: purchase of equipment, plant, and machinery, prepayment of all or a portion of certain outstanding borrowings obtained by the Company, and general corporate purposes.

Company profile:

Happy Forgings Limited is an Indian manufacturer, engaged in designing and manufacturing heavy forgings and high-precision machined components. It manufactures, designs, and tests various products such as crankshafts, front axle carriers, steering knuckles, differential housings, transmission parts, pinion shafts, suspension products, and valve bodies for different industries and customers.

The company’s customer base includes AAM India Manufacturing Corporation Private Limited, Ashok Leyland Limited, Bonfiglioli Transmissions Private Limited, Dana India, IBCC Industries (India) Private Limited, International Tractors Limited, JCB India Limited, Mahindra & Mahindra Limited, Meritor HVS AB, SML ISUZU Limited, Swaraj Engines Limited, and others.

Subscription details: 

On December 21, 2023, the final day of the IPO window, the IPO witnessed an impressive response, especially compared to other recently-listed IPOs, with a subscription rate of 82.63 times. The public issue received remarkable interest, with the retail category being subscribed 15.40 times, the QIB category achieving a subscription rate of 214.65 times, and the NII category reaching a subscription rate of 63.45 times.

The company attracted Rs 302.58 crore from various anchor investors by allocating 35.60 lakh equity shares at Rs 850 per share. The complete lock-in period for these anchor investors ends on April 29, 2024.

The IPO price range was set between Rs 808 and Rs 850, with a face value of Rs 2 per share and a lot size of 17 shares. The total size of the company’s IPO was Rs 1008.60 crore, and the final share issue price was fixed at Rs 850 each.

Financial Performance:

Conclusion: 

The key dilemma for investors lies in whether to hold onto their shares. Those who applied for the IPO solely intending to capitalise on listing gains have already gained an impressive 18% return over its final issue price on the listing day itself. Investors who applied for the IPO purely for listing gains may consider closing their positions. Conversely, investors with a higher risk tolerance might opt to hold onto their shares for the medium to long term, as this strategy could potentially yield benefits over time.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.