Happy Forgings IPO: A Comprehensive Overview


Happy Forgings IPO: A Comprehensive Overview

Bidding Dates
19 Dec ’23 – 21 Dec ’23
Issue Size
1008.59Cr
Min. Investment
Rs.13,736
IPO Doc
RHP PDF
Lot Size
17
Price Range
Rs.808 – Rs.850

About Happy Forgings

Established on July 2, 1979, Happy Forgings has become a leading force in the manufacturing sector, specializing in the design and production of heavy forgings and high-precision machined components.

The company has positioned itself as a reliable partner for original equipment manufacturers (OEMs) involved in the production of commercial vehicles, both domestically and globally.

Beyond the automotive realm, Happy Forgings extends its expertise to manufacturers in diverse sectors, including farm equipment, off-highway vehicles, and industrial machinery.

This broad portfolio serves industries such as oil and gas, power generation, railways, and wind turbine manufacturing.

Parent Organisation
 
Happy Forgings Limited
Founded
 
1979
Managing Director
 
Mr. Paritosh Kumar

Subscription Status as of 20 Dec ’23, 5:30 PM

IPO CategoryIPO Subscription Numbers
QIB0.45x
bNII16.45x
RII7.40x
Tottal7.46x

Strengths:

  1. Remarkable Revenue Growth: Happy Forgings has seen a significant rise in revenue from the sale of machined goods, with revenue from 2021 to 2023 increasing at a CAGR of 44.99% from Rs. 399.202 crore to Rs. 839.233 crore.
  2. Leadership in Forging Capacity: Happy Forgings is the fourth-largest engineering-led manufacturer in India as of 2023. It specialises in heavy forged and highly precise machined components that are complex and safety-critical.
  3. Integrated Operations: The business guarantees efficiency and control throughout the whole production process with its integrated manufacturing operations and internal product and process design capabilities.
  4. Three strategic manufacturing facilities—two in Kanganwal and one in Dugri, Ludhiana, Punjab—allow Happy Forgings to strategically position itself to satisfy the needs of a wide range of clients.
  5. International Presence: Exhibiting a robust and varied global market presence, the company serves clients in more than nine countries, including Brazil, Italy, Japan, Spain, Sweden, Thailand, Turkey, the UK, and the USA.
  6. Wide Range of Products: Happy Forgings, which specialises in intricate and safety-critical heavy forged and highly precise machined components, offers a wide range of products to meet the needs of different industries.
  7. Regular Sales Revenue Distribution: The increase in machined product revenue, which accounted for 72.88% of total revenue in 2021 and grew to 78.66% in 2023, is indicative of a steady and strong sales mix.
  8. CAGR Is Reflective of Robust Financial Performance: The revenue growth rate of 44.99% CAGR highlights the company’s strong financial position and consistent expansion throughout the assessed duration.
  9. Engineering Prowess: Happy Forgings’ emphasis on safety-critical components and engineering-led methodology showcase the company’s technical proficiency in manufacturing exact and superior components.
  10. Regional Development: As a corporation successfully expands outside national lines, it becomes less dependent on any one market by serving customers in other countries.

Risks:

  1. Strong Dependency on Top 10 Clients: Happy Forgings, which will bring in Rs. 838.481 crores in revenue by 2023, is significantly dependent on its top 10 clients. Any one of these clients could be lost, which would have a big effect on the company’s operations, finances, and business.
  2. Supply Chain Issue: The company’s main raw material, steel, comes from a small number of suppliers. Any interruptions in the steel supply could have a detrimental impact on operations, financial health, and business operations in the absence of final supply agreements.
  3. Debt: As of October 31, 2023, Happy Forgings owed Rs. 259.942 crore in outstanding borrowings. This debt presents a danger to the company’s finances and might potentially put pressure on its liquidity.
  4. The rival Credit Risk: Due to its exposure to this risk, the company’s operations, cash flows, and financial standing could all suffer from any delays in payment or non-receipt of funds.
  5. Steel Price Dependency: Happy Forgings’ operations and financial performance are highly impacted by the cost and availability of steel. The operations of the company could be negatively impacted by disruptions in the timely and sufficient supply of steel or volatility in steel pricing.
  6. Dependency on International Revenue: Since a sizeable portion of the company’s revenue comes from clients outside of India, unfavourable developments could affect the company’s overall revenue.
  7. Contingent Liabilities: Happy Forgings has certain liabilities that, if they come to pass, might hurt the company’s cash flows, financial health, and operational outcomes.
  8. Product Dependence Risk: Happy Forgings sells crankshafts for a large percentage of its revenue. As a result, a drop in sales brought on by a downturn in the demand for engines would hurt the company’s operations, financial situation, business, and cash flows.
  9. Operational Concentration: Ludhiana, Punjab, is home to all three of the production sites. The operations of the organisation are exposed to possible hazards resulting from local and regional causes due to this situation.
  10. Global Economic Impact: Due to geopolitical unpredictability and the dynamics of the global economy, unfavourable events that influence the nations in which the company conducts business may have a detrimental effect on overall income.

Before making an informed decision on the Happy Forgings IPO, investors are urged to carefully consider these advantages and disadvantages, carry out in-depth research, and consult with financial experts.

Financial

Happy Forgings IPO: A Comprehensive Overview

Happy Forgings IPO: A Comprehensive Overview

Happy Forgings IPO: A Comprehensive Overview

Application Details

Apply asPrice bandApply upto
RegularRs. 808 – 850Rs.2 Lakh
High Networth IndividualRs.808 – 850Rs.2 – 5 Lakh

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