The third and last initial public offering in March will be Hariom Pipe Industries. Uma Exports and Veranda Learning Solutions are the other two IPOs that have previously gone public.
Bidding for the Hariom Pipe Industries begins on March 30 and ends on April 5. On March 29, the anchor book will open for a day.
The shares would be sold for Rs 144 to Rs 153 a piece, which is 14.4 and 15.3 times the face value of the shares, respectively.
The business intends to raise Rs 122.4 crore at the low end and Rs 130.05 crore at the high end of the pricing range. The initial public offering is for 8.5 million shares.
The business has set aside 30% of the offering for qualified institutional purchasers and 35% for retail and non-institutional investors, respectively. Investors may bid for as little as 98 shares and as many as 98 shares after that. A retail investor may pay as little as Rs 14,994 for a single lot of 98 shares and as much as Rs 1,94,922 for 13 lots.
Apart from general corporate reasons, the net proceeds from the offer will be utilized for capital expenditures and working capital needs.
Profile of the company and its growth
Hariom, situated in Hyderabad, manufactures mild steel pipes, scaffolding, hot-rolled strips, MS billets, and sponge iron for the Indian markets in the south and west. More than 200 distributors and dealers sell its MS pipes in various locations under the Hariom Pipes brand.
Its factory in Telangana’s Mahabubnagar district produces completed steel products from scrap iron and sponge iron. Another factory in Andhra Pradesh’s Anantapur district, bought in September 2020, produces just sponge iron.
By 2026, India’s MS pipe and tube market is predicted to reach $1.69 billion, while the market for galvanized pipes might reach $110.75 million. According to the business, the market for HR strips and coils might reach $5.42 billion by 2026, while the market for MS billets could reach $980 million.
The business plans to extend its MS pipe production capacity using the net proceeds of the offering by building two new mills next to Unit I. The capacity will be increased from 84,000 MTPA to 1,32,000 MTPA as a result of this development.
It will also increase the capacity of the furnace unit, increasing output capacity to 1,04,232 MTPA from 95,832 MTPA now. To reach its aim of becoming an end-to-end and cost-effective producer, the business will continue to investigate backward and forward integration projects.
Sailesh Gupta and Rupesh Kumar Gupta, the company’s promoters, are third-generation entrepreneurs with more than a decade of experience in the iron and steel sector between them. The promoters own 99.1 percent of the company’s stock.
In FY21, Hariom’s profit increased by 91.5 percent to Rs 15.13 crore, while sales increased by 58 percent to Rs 254.13 crore. In the six months ending September 2021, the firm made a profit of Rs 12.87 crore on sales of Rs 200.87 crore. As of September 2021, it had Rs 28.44 crore in long-term borrowings and Rs 59.87 crore in short-term borrowings, compared to Rs 33.9 crore and Rs 46.23 crore at the end of March 2021.
- Any significant rise in raw material costs, as well as any reduction in supply, would have a substantially negative impact on the company’s operations.
- The steel and steel products business is characterized by volatile raw material and energy costs, which may have a negative impact on profitability.
- In recent fiscal years, the corporation has experienced negative cash flows. Detrimental cashflow that persists might have a negative influence on the firm, financial circumstances, and operating outcomes.
- The company’s capacity to procure raw materials at competitive costs might be harmed if third-party mining activities are disrupted.
- The top ten clients provided a major amount of the company’s revenue.
Dates of allotment and listing
By April 8, the corporation will have finalized the share allocation and credited shares to qualified investors. Investors who did not succeed will be refunded by April 11th. The BSE and the NSE will begin trading in the company’s shares on April 13. The issue’s book running lead manager is ITI Capital, and the offer’s registrar is Bigshare Services.
You must first register a Demat account in order to perform online trading if you wish to be one of the public investors in Hariom Pipe Industries’ recent IPO. You may establish a Demat account and start trading in less than 5 minutes with the help of Angel One. Any queries you have concerning your Demat account will be answered by Angel One.
More details on the Hariom Pipe Industries Initial Public Offering should be published shortly.