Happy Forgings IPO Review – GMP, Pricing, Details & More

Happy Forging IPO Review: The forging industry plays a pivotal role in the production of key components for a variety of applications. From automotive to aerospace, oil and gas, and power generation, the demand for high-quality forged products is critical. One of the companies in the industry announcing an initial public offering (IPO) is Happy Forgings Limited.

The IPO will open for subscription on December 19, 2023 and will close on December 21, 2023. In this article, we will look at the Happy Posings IPO review and analyze its strengths, weaknesses, financials, and GMP. Read on to find out!

Happy Forging IPO Review

About Us

Founded in 1979, Happy Forgings is engaged in the design and manufacture of large-scale forgings and high-precision machined parts.

Through our vertically integrated operations, we are involved in engineering, process design, testing, manufacturing and supply of various components that increase margins and add value.

The company primarily targets domestic and global OEMs producing commercial vehicles in the automotive sector. In the non-automotive sector, we target manufacturers of farm equipment, off-highway vehicle manufacturers, and industrial equipment and machinery for the oil and gas, power generation, rail and wind turbine industries.

The following images show large forged and machined products manufactured by the company.

The company owns and operates three manufacturing facilities located at Kanganwal, Ludhiana and Dugri, Ludhiana, Punjab. As of 2023, the total production capacity of forging and processing equipment is 107,000.00MT and 46,100.00MT.

industry information

According to a Ricardo report, the global market for forging and machining is expected to be worth approximately $71.9 billion and $52.5 billion, respectively, in 2023. This market is expected to grow at a CAGR of 5.1% and 5.2%, respectively, to reach a value of $97.0. It will grow to $1 billion and $71.2 billion by 2029.

The forging and machining market in India is expected to witness significant growth in the coming years. The current estimated value of these markets as of fiscal 2024 is $7.3 billion and $5.4 billion, respectively. Additionally, this market is expected to grow at a CAGR of 7.1% and 8.4% to reach $10.2 billion and $8 billion, respectively. Fiscal Year 2029.

Happy Posings IPO – Financial Highlights

A look at Happy Forgings’ financials shows that the company’s operating revenue has increased from Rs. It increased from Rs.584.95 crores in March 2021 to Rs.1196.53 crores in March 2023.

Their profits increased from Rs.86.44 crores in March 2021 to Rs.208.70 crores in March 2023. FY23 net income gives the company a gross margin of 17.44% on sales.

As of FY24, the total revenue and net profit for the first six months stood at Rs. 672.9 crores and Rs.119.29 crores.

In terms of returns, ROE is 21.12% and RoCE is 24.23% in FY23. These ratios indicate good returns on shareholder capital and efficient use of the company’s resources.

During FY23, the company’s Debt/Total Net Worth was reported to be 0.22. This indicates that the company primarily uses its own funds to run its business.

Key players in the market

The following image shows a comparison between Happy Forgings and its peers on the market.

Company Strengths

• The company is India’s fourth largest engineering-focused manufacturer of complex, safety-critical, large-scale forged and high-precision machined components. In addition, we have the world’s second-largest production capacity in the commercial vehicle and high-horsepower industrial crankshaft field, establishing ourselves as a leader in the domestic crankshaft manufacturing industry.
• The company has integrated manufacturing operations with in-house product and process design capabilities. This gives the company a diverse product portfolio that allows it to serve a variety of industries and customers, which enhances its ability to attract new customers.
• The company operates a very diverse business across customer bases and industries. The company serves commercial vehicle OEMs in the automotive sector and provides precision components to OEMs in a variety of industries, including agricultural machinery, off-highway vehicles, and industrial machinery and equipment.
• The company has built long-standing relationships with several Indian customers over the past 40 years. As of FY23, the company served 66 customers, and as of FY24, it served a total of 59 customers.
• The Company believes that its significant manufacturing capabilities currently act as a barrier to entry for other manufacturers and OEMs that do not have similar internal engineering capabilities and production facilities.

company’s weaknesses

• The company’s business depends on its top 10 customers. Losing these customers can have a serious impact on your business.
• The Customer does not enter into a formal contract with the Company while placing an Order. If your customers get their requirements from someone else, it can have a negative impact on your business.
• The company relies on a few suppliers for its raw material requirements. Any disruption in the supply of these materials could have a negative impact on our business.
• The company requires significant capital expenditures and working capital to operate. Our inability to obtain such capital could have a negative impact on our business.
• The company’s profitability depends on the availability and cost of its key raw material, steel. Any disruption in the availability of adequate steel at the right time or volatility in steel prices could have a negative impact on our business.

Happy Posings IPO Review – GMP

Shares of Happy Forgings Limited were trading at a premium of 54.12% in the gray market on December 15, 2023. The stock was lagging at Rs 1310. This gives a premium of Rs 460 per share on a ceiling price of Rs 850.

Key IPO Information

promoter: Paritosh Kumar, Ashish Garg, Mega Garg, Ayush Capital & Financial Services Private Limited, Garg Family Trust, Paritosh Kumar Garg (HUF) and Ashish Garg & Sons (HUF).

Book Operations Lead Manager: Axis Capital Limited, Equirus Capital Private Limited, JM Financial Limited and Motilal Oswal Investment Advisors Limited.

Proposal registered by: Link Intime India Private Limited

purpose of the problem

IPO proceeds will be used for the following purposes:

• For purchasing equipment, plant and machinery
• Advance payment of all or part of certain outstanding borrowings provided by the Company;
• General corporate purposes

Finishing

In this article, we looked at the details of Happy Posings IPO Review. We conclude that the company’s strong financial position, combined with its dominant market position and stringent entry barriers for new entrants, suggests that the company has good potential for growth in the future.

What do you think the future holds for your company? Applying for an IPO? Let us know in the comments below.

Written by Aaron Barth

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