Happy Forgings files IPO draft with Sebi for fundraising

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Punjab-based Auto Component Manufacturer, Happy Forgings Ltd, Takes Step Towards IPO with Sebi Filing

Happy Forgings Ltd, a prominent auto components manufacturer based in Punjab, has recently taken a significant stride towards its fundraising goals by submitting draft documents to the Securities and Exchange Board of India (Sebi) for approval of a public issue.

The proposed Initial Public Offering (IPO) encompasses a fresh issuance valued at Rs 500 crore, coupled with an offer-for-sale (OFS) arrangement, involving the sale of up to 8.05 million shares by the company’s existing shareholders and promoters. The OFS component will comprise of up to 5.37 million shares held by Paritosh Kumar Garg (HUF) and up to 2.68 million shares held by India Business Excellence Fund III.

The anticipated proceeds from this offering, amounting to Rs 227.86 crore, are earmarked for acquiring essential equipment, plant machinery, while Rs 190 crore will be dedicated to debt repayment. As of July 15, the company’s outstanding borrowings stood at Rs 203.23 crore.

This transformative financial step is being shepherded by a consortium of notable lead managers including JM Financial, Axis Capital, Equirus Capital Pvt Ltd, and Motilal Oswal Investment Advisors Ltd.

Happy Forgings specializes in engineering, process design, testing, production, and distribution of a diverse array of components, which significantly bolster profit margins and add substantial value. The company’s core focus revolves around serving both domestic and international Original Equipment Manufacturers (OEMs) operating in the commercial vehicle segment.

Furthermore, the company’s influence extends beyond the automotive sphere into non-automotive sectors such as farm equipment, off-highway vehicles, as well as the production of industrial machinery for industries spanning oil and gas, power generation, railways, and wind turbines.

The company’s manufacturing prowess is embodied in an extensive portfolio of sturdy forged and machined products. This includes a range of items such as crankshafts, front axle beams, steering knuckles, transmission components, differential cases, suspension items, pinion shafts, and valve bodies. These products cater to diverse industries and serve a broad customer base.

With possession of and management over three distinct manufacturing plants, Happy Forgings operates two facilities in Kanganwal, Ludhiana, alongside another in Dugri, Ludhiana, Punjab. The combined annual capacity for forging and machining has witnessed an impressive expansion from 67,000 MT and 29,500 MT to 107,000 MT and 46,100 MT respectively, as of March 31, 2023.

In the fiscal year 2023, the company’s financial performance demonstrated remarkable growth, with reported revenues of Rs 1,196.53 crore, marking a significant increase from Rs 860.05 crore in the previous year. The net profit for the year exhibited a commendable surge, rising to Rs 208.70 crore from Rs 142.29 crore in the preceding year. This commendable performance has led to an enhancement of the EBITDA margin to 28.49 percent, compared to the 26.85 percent figure recorded in the prior year.

About Happy Forgings:

Happy Forgings Limited is a manufacturer of automotive components, specializing in the production and distribution of items such as steering knuckles, front axle beams, bevel gears, countershafts, and transmission components. The company’s clientele is primarily based in India.

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