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Happy Forgings Ltd IPO
Status:
Overview
IPO date
19 Dec 2023 to 21 Dec 2023
Face value
₹ 2 per share
Price
₹ 808 to ₹850 per share
Issue Size
11,865,802 shares
(aggregating up to ₹ 1008.59 Cr)
(aggregating up to ₹ 1008.59 Cr)
Allotment Date
22 Dec 2023
Listing at
NSE
Issue type
Book Building
Sector
Objectives of Happy Forgings Ltd IPO
Initial public offering of 11,865,802 equity shares*** of face value of
Rs. 2 each of the company ("Equity Shares") for cash at a price of Rs. 850 per equity share (including a share premium of Rs. 848 per equity share) ("Offer Price") aggregating to Rs. 1008.59 crores*** ("Offer"). The offer comprises a fresh issue of 4,705,882 equity shares*** aggregating to
Rs.400.00 crores*** ("Fresh Issue") and an offer for sale of 7,159,920 equity shares*** ("Offered Shares") aggregating to Rs. 608.59 crores***, 4,922,445 equity shares*** aggregating to Rs. 418.41 crores*** by Paritosh Kumar Garg (huf) (the "Promoter Selling Shareholder") and 2,237,475 equity shares*** aggregating to Rs. 190.19 crores*** by India Business Excellence Fund - iii (the "Investor Selling Shareholder" and together with the promoter selling shareholder, the "Selling Shareholders"), and such offer for sale of equity shares by the selling shareholders, the "Offer for Sale"). The offer will constitute 12.60% of the post offer paid up equity share capital of the company.
***Subject to finalisation of the basis of allotment.
The face value of the equity share is Rs. 2 each. The offer price is 425 times the face value of the equity shares.f
Happy Forgings Ltd IPO Strategy
- Leverage in-house engineering and product development capabilities to grow its product portfolio and tap growing business opportunities in the industrial markets.
- Foray into lightweight forging and machining with introduction of aluminium components.
- Increase its wallet share and acquire new business by leveraging existing OEM relationships and adding new customers.
- Capitalise on increasing demand from international markets to grow exports.
- Expand capacity at its existing manufacturing facilities.
- Continue to reduce operating costs and improve operational efficiencies.
- Grow inorganically through strategic acquisitions and alliances
About Happy Forgings Ltd
Happy Forgings Limited was incorporated as Happy Forgings Private Limited' at Jalandhar, Punjab as a private limited company, pursuant to a certificate of incorporation dated July 2, 1979, issued by the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh. Thereafter, Company was converted from a private limited company to a public limited company, and the name of Company was changed to Happy Forgings Limited', and a fresh certificate of incorporation dated April 1, 1998, issued by the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh.
Happy Forgings are an engineering led manufacturer of complex and safety critical, heavy forged and high precision machined components in India. The Company manufacture a wide range of forged and machined products such as crankshafts, front axle beams, steering knuckles, differential cases, transmission parts, planetary carriers, suspension brackets and valve bodies across industries for a diversified base of customers. It mainly cater to domestic and global OEMs manufacturing commercial vehicles in the automotive sector and manufacturers of farm equipment, off-highway vehicles and manufacturers of industrial equipment and machinery for oil and gas, power generation, railways and wind turbine industries into the non-automotive sector.
The Company has emerged as a leading player in the domestic crankshaft manufacturing industry with the second largest production capacity for commercial vehicle and high horse-power industrial crankshafts in India. In 1995, the Company purchased heavy duty hammers for manufacturing of oil engine parts and motor parts. In 2006, it commissioned operations at Kanganwal Facility II unit, in 2008, commissioned first 8,000 ton forging press; commenced manufacturing front steering parts by procuring axle arms in 2009 and installed model grinding technology used to manufacture four cylinder and six cylinder crankshafts. In 2011, it ventured into commercial vehicles, farm equipment and industrial equipment industries; later on, the second 8,000 ton forging press was commissioned during 2017; again it ventured into a new sector by manufacturing pinion shaft in the wind turbine industry in 2019; installed third 8,000 ton forging press line in 2021; commenced Dugri Facility operations in 2021, commissioned front axle beam for electric buses into commercial vehicle industry in 2022 and thereafter, installed 8 dedicated lines for manufacturing crankshafts and commissioned first 14,000 ton forging press line in 2022.
Through Initial Public Offer, the Company is planning Equity Shares of Fresh Issue aggregating Rs 500 Crores and an Offer for Sale by issuing 8,054,910 Equity Shares.
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Strengths vs Risks of Happy Forgings Ltd
Know the pros & cons
Strengths
Fourth largest engineering led manufacturer of complex and safety critical, heavy forged and high precision machined components in India.- Integrated manufacturing operations coupled with in-house product and process design capabilities
resulting in a diverse product portfolio with increasing value addition.
- Diversified business model, well placed to take advantage of potential alternative engine technologies.
- Long-standing relationships with customers across industries.
- Track record of consistently building capabilities and infrastructure, with focus on capital efficiency.
- Experienced Promoters and senior management team.
- Track record of healthy financial performance.
Risks
- The company's business largely depends upon its top 10 customers which contributed 70.08%, 74.64% and 79.22% in Fiscal 2023, 2022 and 2021. The loss of any of these customers could have a material adverse effect on its business, financial condition, results of operations and cash flows.
- The company does not have firm commitment agreements with its customers. If the company customers choose not to source their requirements from it, there may be a material adverse effect on its business, financial condition,cash flows and results of operations.
- The company's business is dependent on the performance of certain industries particularly commercial vehicles, farm equipment and off-highway vehicles both in the Indian and overseas markets. Any adverse changes in the conditions affecting these industries can adversely impact its business, results of operations, cash flows and financial condition.
- The company is subject to strict performance requirements, including, but not limited to, quality and delivery, by its customers, and any failure by it to comply with these performance requirements may lead to the cancellation of existing and future orders, recalls or warranty and liability claims.
- The company's business and profitability is substantially dependent on the availability and cost of its steel, the company primary raw material and any disruption to the timely and adequate supply of steel, or volatility in the prices of Steel may adversely impact its business, results of operations, cash flows and financial condition.
- The company is export its products to various countries including Brazil, Italy, Japan, Spain, Sweden, Thailand, Turkey, United Kingdom and United States of America. Any adverse events affecting these countries could have an adverse impact on its results from operations.
- The company derives a substantial portion of its revenue from the sale of crankshafts and loss of sales due to reduction in demand for crankshafts would have a material adverse effect on its business, financial condition, results of operations and cash flows.
- The company manufacturing facilities are subject to operating risks. Any shutdown of its manufacturing facilities of the company existing or future manufacturing facilities or other production problems caused by unforeseen events may reduce sales and adversely affect its business, cash flows, results of operations and financial condition.
- All of its three manufacturing facilities are located in Ludhiana, Punjab which exposes the company operations to potential risks arising from local and regional factors such as adverse social and political events, weather conditions and natural disasters.
- The company operations involve activities and materials which are hazardous in nature and could result in a suspension of operations and/or the imposition of civil or criminal liabilities which could adversely affect its business, results of operations, cash flow and financial condition.
- The company depends on a few suppliers for the supply of steel, its primary raw material. Further, the company do not have definitive supply agreements with its suppliers for the supply of steel. Interruptions in the supply of steel could adversely affect its business, financial condition, results of operations and cash flows.
- The company is dependent on third parties for the transportation and timely delivery of its products to customers. Any failure by or loss of a third party transport service provider could result in delays and increased costs, which may adversely affect its business.
- The company has significant power and fuel requirements and any disruption to power or fuel sources could increase its production costs and adversely affect the company business, financial condition, cash flows and results of operations.
- The company Statutory Auditors have included a disclaimer of opinion in the annexure to their report on the internal financial controls on the standalone financial statements of the Company for the year ended March 31, 2021. Further, its Statutory Auditors have included certain qualifications in the annexure to their audit reports on the Companies (Auditor's Report) Order, 2016 / Companies (Auditor's Report) Order, 2020, for the years ended March 31, 2023 and March 31, 2021.
- The company insurance coverage may not be adequate or its may incur uninsured losses or losses in excess of the company insurance coverage which may impact on its financial condition, cash flows and results in operations.
- The company has incurred indebtedness and an inability to comply with repayment and other covenants in its financing agreements could adversely affect the company business, results of operations, cash flows and financial condition.
- Pricing pressure from its customers may adversely affect the company gross margin, profitability and ability to increase its prices, which may in turn have a material adverse effect on its results of operations, cash flows and financial condition.
- Exchange rate fluctuations may adversely affect its business, financial conditions, cash flows and results of operations.
- The company has substantial capital expenditure and working capital requirements and may require additional capital and financing in the future and our operations could be curtailed if we are unable to obtain the required additional capital and financing when needed.
- The company has certain contingent liabilities that have been disclosed in its financial statements, which if they materialize, may adversely affect its results of operations, cash flows and financial condition.
- The company has in the past entered into related party transactions and may continue to do so in the future.
- The company is unable to trace some of its historical records including forms filed with the Registrar of Companies.
- The company requires certain licenses, permits and approvals in the ordinary course of business, and the failure to obtain or retain them in a timely manner may materially adversely affect its operations.
- The company does not have trademark registration for its new corporate logo . If the company is unable to register its corporate logo, its may not be able to protect or enforce our rights to own or use its corporate logo which could have an adverse effect on the company business and competitive position.
- The Company, Promoters, and Directors are or may be involved in certain legal and regulatory proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, financial condition, cash flows and results of operations.
- The company intend to utilise a portion of the Net Proceeds for funding the purchase of certain equipment, plant and machinery. Its yet to place orders for purchase of a majority of such equipment, plant and machinery and there can be no assurance that the company will be able to place orders for such equipment and machinery, in a timely manner or at all.
- Any variation in the utilization of the Net Proceeds as disclosed in this Draft Red Herring Prospectus shall be subject to certain compliance requirements, including prior approval of the shareholders of the Company.
- The company funding requirements and proposed deployment of the Net Proceeds of the Offer have not been appraised by a bank or a financial institution and if there are any delays or cost overruns, its business, cash flows, financial condition and results of operations may be adversely affected.
- The company is exposed to counterparty credit risk and any delay in receiving payments or non-receipt of payments may adversely impact its business, financial condition, cash flows and results of operations.
- Fraud, theft, employee negligence or similar incidents may adversely affect its results of operations and cash flows.
- The Company may not be successful in implementing its strategies, including growing its product portfolio to cater to the industries such as oil and gas, power generation, wind turbine and defence and foraying into lightweight forging with introduction of aluminium components, which could adversely affect the company business, cash flows, results of operations and future prospects.
- Any failure to compete effectively in the highly competitive forged and machined components industry could have a material adverse effect on its business, financial condition, results of operations and cash flows.
- The company depends on ita senior management and other personnel with technical expertise, and if its unable to recruit and retain qualified and skilled personnel, its business and the company ability to operate or grow the company business may be adversely affected.
- The company currently avail benefits under certain Government incentive schemes. Cancellation or its inability to meet the conditions under such schemes may result in adversely affect the company business operations, cash flows, results of operations and financial condition.
- The company has not incurred certain required portions of its profits towards corporate social responsibility ("CSR") requirements under the Companies Act 2013.
- Any disruption to the steady and regular supply of workforce for its operations, including due to strikes, work stoppages or increased wage demands by the company workforce or any other kind of disputes with its workforce or the company inability to control the composition and cost of its workforce could adversely affect the company business, cash flows and results of operations.
- Technology failures could disrupt its operations and adversely affect the company business operations and financial performance.
- The company may undertake acquisitions, investments, joint ventures or other strategic alliances, which may have a material adverse effect on its ability to manage the company business, and such undertakings may be unsuccessful.
- The COVID-19 pandemic impacted its business and operations. Future similar events may have an adverse effect on the company business prospects and financial performance.
- Information relating to its annual installed capacity, annual average available capacity and the historical capacity utilization of the company manufacturing facilities included in this Draft Red Herring Prospectus is based on various assumptions and estimates and future production and capacity utilization may vary.
- The company Promoters and members of its Promoter Group will continue to hold a significant equity stake in the Company after the Offer and their interests may differ from those of the other shareholders.
- Certain sections of this Draft Red Herring Prospectus disclose information from the Ricardo Report which is a paid report and commissioned and paid for by it exclusively in connection with the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.
- The company Promoters and Directors hold Equity Shares in the Company and are therefore interested in the Company's performance in addition to their remuneration and reimbursement of expenses.
- Certain non-GAAP financial measures and certain other statistical information relating to its operations and financial performance like EBITDA, EBITDA Margin, Return on Capital Employed, PAT Margin, Return on Equity, Gross Fixed Assets Turnover Ratio, Gross Profit, Gross Margin and Net Debt to EBITDA have been included in this Draft Red Herring Prospectus. These non-GAAP financial measures are not measures of operating performance or liquidity defined by Ind AS and may not be comparable.
- The average cost of acquisition of Equity Shares for its Selling Shareholders may be lower than the Offer Price.
- The company's ability to access capital at attractive costs depends on its credit ratings. Non-availability of credit ratings or a poor rating may restrict the company access to capital and thereby adversely affect its business, financial conditions, cash flows and results of operations.
- Certain of its Promoter Group entities and Group Companies are in businesses similar to its and this may result in conflict of interest with the company.
- In this Draft Red Herring Prospectus, the company has compared consolidated financial information as of and for the year ended March 31, 2023 and for the year ended March 31, 2022 with its standalone financial information as of and for the year ended March 31, 2021. These periods are not comparable to each other.
Happy Forgings Ltd Peer Comparison
Understand the company’s industry standing
Happy Forgings Ltd
Bharat Forge Ltd
Craftsman Automation Ltd
Face Value
2
2
5
Standalone / Consolidated
Consolidated
Consolidated
Consolidated
Total Income Rs. Cr.
1196.53
12910.26
3182.6
EPS-Basis
23.32
11.35
117.56
EPS-Diluted
23.32
11.35
117.56
NAV Per Share
110.43
144.02
651.68
P/E-Basic EPS
---
102.63
43.92
P/E-Diluted EPS
---
---
---
RONW(%)
21.12
7.88
18.04
Latest NAV Period
---
---
---
Latest NAV
---
---
---
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Open link to the registrar using this URL (https://evault.kfintech.com/ipostatus/).
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Enter details- PAN, Application number or DP client ID
Get your allotment status
Open link to the registrar using this URL (https://evault.kfintech.com/ipostatus/).
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The IPO opens on 19 Dec 2023 & closes on 21 Dec 2023.
Happy Forgings Limited was incorporated as Happy Forgings Private Limited' at Jalandhar, Punjab as a private limited company, pursuant to a certificate of incorporation dated July 2, 1979, issued by the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh. Thereafter, Company was converted from a private limited company to a public limited company, and the name of Company was changed to Happy Forgings Limited', and a fresh certificate of incorporation dated April 1, 1998, issued by the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh.
Happy Forgings are an engineering led manufacturer of complex and safety critical, heavy forged and high precision machined components in India. The Company manufacture a wide range of forged and machined products such as crankshafts, front axle beams, steering knuckles, differential cases, transmission parts, planetary carriers, suspension brackets and valve bodies across industries for a diversified base of customers. It mainly cater to domestic and global OEMs manufacturing commercial vehicles in the automotive sector and manufacturers of farm equipment, off-highway vehicles and manufacturers of industrial equipment and machinery for oil and gas, power generation, railways and wind turbine industries into the non-automotive sector.
The Company has emerged as a leading player in the domestic crankshaft manufacturing industry with the second largest production capacity for commercial vehicle and high horse-power industrial crankshafts in India. In 1995, the Company purchased heavy duty hammers for manufacturing of oil engine parts and motor parts. In 2006, it commissioned operations at Kanganwal Facility II unit, in 2008, commissioned first 8,000 ton forging press; commenced manufacturing front steering parts by procuring axle arms in 2009 and installed model grinding technology used to manufacture four cylinder and six cylinder crankshafts. In 2011, it ventured into commercial vehicles, farm equipment and industrial equipment industries; later on, the second 8,000 ton forging press was commissioned during 2017; again it ventured into a new sector by manufacturing pinion shaft in the wind turbine industry in 2019; installed third 8,000 ton forging press line in 2021; commenced Dugri Facility operations in 2021, commissioned front axle beam for electric buses into commercial vehicle industry in 2022 and thereafter, installed 8 dedicated lines for manufacturing crankshafts and commissioned first 14,000 ton forging press line in 2022.
Through Initial Public Offer, the Company is planning Equity Shares of Fresh Issue aggregating Rs 500 Crores and an Offer for Sale by issuing 8,054,910 Equity Shares.
Happy Forgings Ltd IPO will close on 21 Dec 2023.
- Fourth largest engineering led manufacturer of complex and safety critical, heavy forged and high precision machined components in India.
- Integrated manufacturing operations coupled with in-house product and process design capabilities resulting in a diverse product portfolio with increasing value addition.
- Diversified business model, well placed to take advantage of potential alternative engine technologies.
- Long-standing relationships with customers across industries.
- Track record of consistently building capabilities and infrastructure, with focus on capital efficiency.
- Experienced Promoters and senior management team.
- Track record of healthy financial performance.
| S.No | Promoters Name | Pre Issue Shares | Pre Issue Percentage | Post Issue Shares | Post Issue Percentage |
|---|---|---|---|---|---|
| 1 | Paritosh Kumar | 8949900 | 10 | 8949900 | 9.5 |
| 2 | Ashish Garg | 12946200 | 14.47 | 12946200 | 13.74 |
| 3 | Megha Garg | 2419900 | 2.7 | 2419900 | 2.57 |
| 4 | Ayush Capital & Financial Ser | 10745100 | 12.01 | 10745100 | 11.41 |
| 5 | Garg Family Trust | 38047000 | 42.51 | 38047000 | 40.39 |
| 6 | Paritosh Kumar Garg (HUF) | 5607700 | 6.27 | 685255 | 0.73 |
| 7 | Ashish Garg & Sons (HUF) | 254200 | 0.28 | 254200 | 0.27 |
- The company's business largely depends upon its top 10 customers which contributed 70.08%, 74.64% and 79.22% in Fiscal 2023, 2022 and 2021. The loss of any of these customers could have a material adverse effect on its business, financial condition, results of operations and cash flows.
- The company does not have firm commitment agreements with its customers. If the company customers choose not to source their requirements from it, there may be a material adverse effect on its business, financial condition,cash flows and results of operations.
- The company's business is dependent on the performance of certain industries particularly commercial vehicles, farm equipment and off-highway vehicles both in the Indian and overseas markets. Any adverse changes in the conditions affecting these industries can adversely impact its business, results of operations, cash flows and financial condition.
- The company is subject to strict performance requirements, including, but not limited to, quality and delivery, by its customers, and any failure by it to comply with these performance requirements may lead to the cancellation of existing and future orders, recalls or warranty and liability claims.
- The company's business and profitability is substantially dependent on the availability and cost of its steel, the company primary raw material and any disruption to the timely and adequate supply of steel, or volatility in the prices of Steel may adversely impact its business, results of operations, cash flows and financial condition.
- The company is export its products to various countries including Brazil, Italy, Japan, Spain, Sweden, Thailand, Turkey, United Kingdom and United States of America. Any adverse events affecting these countries could have an adverse impact on its results from operations.
- The company derives a substantial portion of its revenue from the sale of crankshafts and loss of sales due to reduction in demand for crankshafts would have a material adverse effect on its business, financial condition, results of operations and cash flows.
- The company manufacturing facilities are subject to operating risks. Any shutdown of its manufacturing facilities of the company existing or future manufacturing facilities or other production problems caused by unforeseen events may reduce sales and adversely affect its business, cash flows, results of operations and financial condition.
- All of its three manufacturing facilities are located in Ludhiana, Punjab which exposes the company operations to potential risks arising from local and regional factors such as adverse social and political events, weather conditions and natural disasters.
- The company operations involve activities and materials which are hazardous in nature and could result in a suspension of operations and/or the imposition of civil or criminal liabilities which could adversely affect its business, results of operations, cash flow and financial condition.
- The company depends on a few suppliers for the supply of steel, its primary raw material. Further, the company do not have definitive supply agreements with its suppliers for the supply of steel. Interruptions in the supply of steel could adversely affect its business, financial condition, results of operations and cash flows.
- The company is dependent on third parties for the transportation and timely delivery of its products to customers. Any failure by or loss of a third party transport service provider could result in delays and increased costs, which may adversely affect its business.
- The company has significant power and fuel requirements and any disruption to power or fuel sources could increase its production costs and adversely affect the company business, financial condition, cash flows and results of operations.
- The company Statutory Auditors have included a disclaimer of opinion in the annexure to their report on the internal financial controls on the standalone financial statements of the Company for the year ended March 31, 2021. Further, its Statutory Auditors have included certain qualifications in the annexure to their audit reports on the Companies (Auditor's Report) Order, 2016 / Companies (Auditor's Report) Order, 2020, for the years ended March 31, 2023 and March 31, 2021.
- The company insurance coverage may not be adequate or its may incur uninsured losses or losses in excess of the company insurance coverage which may impact on its financial condition, cash flows and results in operations.
- The company has incurred indebtedness and an inability to comply with repayment and other covenants in its financing agreements could adversely affect the company business, results of operations, cash flows and financial condition.
- Pricing pressure from its customers may adversely affect the company gross margin, profitability and ability to increase its prices, which may in turn have a material adverse effect on its results of operations, cash flows and financial condition.
- Exchange rate fluctuations may adversely affect its business, financial conditions, cash flows and results of operations.
- The company has substantial capital expenditure and working capital requirements and may require additional capital and financing in the future and our operations could be curtailed if we are unable to obtain the required additional capital and financing when needed.
- The company has certain contingent liabilities that have been disclosed in its financial statements, which if they materialize, may adversely affect its results of operations, cash flows and financial condition.
- The company has in the past entered into related party transactions and may continue to do so in the future.
- The company is unable to trace some of its historical records including forms filed with the Registrar of Companies.
- The company requires certain licenses, permits and approvals in the ordinary course of business, and the failure to obtain or retain them in a timely manner may materially adversely affect its operations.
- The company does not have trademark registration for its new corporate logo . If the company is unable to register its corporate logo, its may not be able to protect or enforce our rights to own or use its corporate logo which could have an adverse effect on the company business and competitive position.
- The Company, Promoters, and Directors are or may be involved in certain legal and regulatory proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, financial condition, cash flows and results of operations.
- The company intend to utilise a portion of the Net Proceeds for funding the purchase of certain equipment, plant and machinery. Its yet to place orders for purchase of a majority of such equipment, plant and machinery and there can be no assurance that the company will be able to place orders for such equipment and machinery, in a timely manner or at all.
- Any variation in the utilization of the Net Proceeds as disclosed in this Draft Red Herring Prospectus shall be subject to certain compliance requirements, including prior approval of the shareholders of the Company.
- The company funding requirements and proposed deployment of the Net Proceeds of the Offer have not been appraised by a bank or a financial institution and if there are any delays or cost overruns, its business, cash flows, financial condition and results of operations may be adversely affected.
- The company is exposed to counterparty credit risk and any delay in receiving payments or non-receipt of payments may adversely impact its business, financial condition, cash flows and results of operations.
- Fraud, theft, employee negligence or similar incidents may adversely affect its results of operations and cash flows.
- The Company may not be successful in implementing its strategies, including growing its product portfolio to cater to the industries such as oil and gas, power generation, wind turbine and defence and foraying into lightweight forging with introduction of aluminium components, which could adversely affect the company business, cash flows, results of operations and future prospects.
- Any failure to compete effectively in the highly competitive forged and machined components industry could have a material adverse effect on its business, financial condition, results of operations and cash flows.
- The company depends on ita senior management and other personnel with technical expertise, and if its unable to recruit and retain qualified and skilled personnel, its business and the company ability to operate or grow the company business may be adversely affected.
- The company currently avail benefits under certain Government incentive schemes. Cancellation or its inability to meet the conditions under such schemes may result in adversely affect the company business operations, cash flows, results of operations and financial condition.
- The company has not incurred certain required portions of its profits towards corporate social responsibility ("CSR") requirements under the Companies Act 2013.
- Any disruption to the steady and regular supply of workforce for its operations, including due to strikes, work stoppages or increased wage demands by the company workforce or any other kind of disputes with its workforce or the company inability to control the composition and cost of its workforce could adversely affect the company business, cash flows and results of operations.
- Technology failures could disrupt its operations and adversely affect the company business operations and financial performance.
- The company may undertake acquisitions, investments, joint ventures or other strategic alliances, which may have a material adverse effect on its ability to manage the company business, and such undertakings may be unsuccessful.
- The COVID-19 pandemic impacted its business and operations. Future similar events may have an adverse effect on the company business prospects and financial performance.
- Information relating to its annual installed capacity, annual average available capacity and the historical capacity utilization of the company manufacturing facilities included in this Draft Red Herring Prospectus is based on various assumptions and estimates and future production and capacity utilization may vary.
- The company Promoters and members of its Promoter Group will continue to hold a significant equity stake in the Company after the Offer and their interests may differ from those of the other shareholders.
- Certain sections of this Draft Red Herring Prospectus disclose information from the Ricardo Report which is a paid report and commissioned and paid for by it exclusively in connection with the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.
- The company Promoters and Directors hold Equity Shares in the Company and are therefore interested in the Company's performance in addition to their remuneration and reimbursement of expenses.
- Certain non-GAAP financial measures and certain other statistical information relating to its operations and financial performance like EBITDA, EBITDA Margin, Return on Capital Employed, PAT Margin, Return on Equity, Gross Fixed Assets Turnover Ratio, Gross Profit, Gross Margin and Net Debt to EBITDA have been included in this Draft Red Herring Prospectus. These non-GAAP financial measures are not measures of operating performance or liquidity defined by Ind AS and may not be comparable.
- The average cost of acquisition of Equity Shares for its Selling Shareholders may be lower than the Offer Price.
- The company's ability to access capital at attractive costs depends on its credit ratings. Non-availability of credit ratings or a poor rating may restrict the company access to capital and thereby adversely affect its business, financial conditions, cash flows and results of operations.
- Certain of its Promoter Group entities and Group Companies are in businesses similar to its and this may result in conflict of interest with the company.
- In this Draft Red Herring Prospectus, the company has compared consolidated financial information as of and for the year ended March 31, 2023 and for the year ended March 31, 2022 with its standalone financial information as of and for the year ended March 31, 2021. These periods are not comparable to each other.
The Issue type of Happy Forgings Ltd is Book Building.
The minimum application for shares of Happy Forgings Ltd is 17.
The total shares issue of Happy Forgings Ltd is 11865802.
Initial public offering of 11,865,802 equity shares*** of face value of
Rs. 2 each of the company ("Equity Shares") for cash at a price of Rs. 850 per equity share (including a share premium of Rs. 848 per equity share) ("Offer Price") aggregating to Rs. 1008.59 crores*** ("Offer"). The offer comprises a fresh issue of 4,705,882 equity shares*** aggregating to
Rs.400.00 crores*** ("Fresh Issue") and an offer for sale of 7,159,920 equity shares*** ("Offered Shares") aggregating to Rs. 608.59 crores***, 4,922,445 equity shares*** aggregating to Rs. 418.41 crores*** by Paritosh Kumar Garg (huf) (the "Promoter Selling Shareholder") and 2,237,475 equity shares*** aggregating to Rs. 190.19 crores*** by India Business Excellence Fund - iii (the "Investor Selling Shareholder" and together with the promoter selling shareholder, the "Selling Shareholders"), and such offer for sale of equity shares by the selling shareholders, the "Offer for Sale"). The offer will constitute 12.60% of the post offer paid up equity share capital of the company.
***Subject to finalisation of the basis of allotment.
The face value of the equity share is Rs. 2 each. The offer price is 425 times the face value of the equity shares.f