Happy Forgings files draft papers with Sebi to raise funds through IPO

The IPO consists of a fresh issue of Rs 500 crore and an offer for sale of upto 8.05 million shares by its existing shareholders and promoters.

Punjab-based auto components maker Happy Forgings Ltd has filed the draft papers with the Securities and Exchange Board of India (Sebi) to raise funds through a public issue.

The IPO will consist of a fresh issue of Rs 500 crore and an offer-for-sale of up to 8.05 million shares by its existing shareholders and promoters. The OFS will comprise up to 5.37 million shares by Paritosh Kumar Garg (HUF) and up to 2.68 million shares by India Business Excellence Fund III.

The proceeds from the issue worth Rs 227.86 crore will be used to buy equipment, plant and machinery and Rs 190 crore will be used to repay debt. As of July 15, the company has total outstanding borrowings of Rs 203.23 crore.

JM Financial, Axis Capital, Equirus Capital Pvt Ltd and Motilal Oswal Investment Advisors Ltd are lead managers to the issue.

The company is involved in engineering, process design, testing, production, and distribution of a diverse range of components that contribute positively to profit margins and provide additional value. Its main focus is on serving domestic and international original equipment manufacturers (OEMs) that produce commercial vehicles within the automotive sector.

Additionally, it serves non-automotive industries such as farm equipment, off-highway vehicles, and the manufacturing of industrial equipment and machinery for sectors like oil and gas, power generation, railways, and wind turbine industries.

The company produces an extensive array of robust forged and machined items. These encompass crankshafts, front axle beams, steering knuckles, differential cases, transmission components, pinion shafts, suspension items, and valve bodies. These products serve various industries and cater to a diverse customer base.

The company possesses and manages three manufacturing plants. Among these, two are situated in Kanganwal, Ludhiana, while one is located in Dugri in Ludhiana, Punjab. The combined yearly installed capacity for forging and machining has undergone an augmentation from 67,000 MT and 29,500 MT, respectively8 to 107,000 MT and 46,100 MT, respectively, as of March 31, 2023.

For FY23, the company reported a revenue of Rs 1,196.53 crore as against Rs 860.05 crore a year ago. Net profit for the year jumped to Rs 208.70 crore from Rs 142.29 crore last year, while the EBITDA margin improved to 28.49 percent from 26.85 percent a year ago.