Happy Forgings Limited’s Initial Public Offering to open on Tuesday, December 19, 2023, sets price band at ₹808 to ₹850 per Equity Share

• Price Band of ₹808 – ₹850 per equity share bearing face value of ₹2 each (“Equity Shares”) 
• Bid/Offer Opening Date – Tuesday, December 19, 2023 and Bid/Offer Closing Date – Thursday, December 21, 2023. 
• Minimum Bid Lot is 17 Equity Shares and in multiples of 17 Equity Shares thereafter. 
• The Floor Price is 404 times the face value of the Equity Share and the Cap Price is 425 times the face value of the Equity Share. 

Mumbai, December 14, 2023: Happy Forgings Limited (“HFL” or the “Company”), the fourth largest engineering led manufacturer of complex and safety critical, heavy forged and high precision machined components in India         as of Fiscal 2023 in terms of forgings capacity (Source: ‘Industry Report on Global and Indian Forging and Machining Markets’ dated November 30, 2023  issued by Ricardo India Private Limited (“Ricardo Report”)), has fixed the price band at ₹808 to ₹850 per Equity Share for its initial public offer.  The Initial Public Offering (“IPO” or “Offer”) of the Company will open on Tuesday, December 19, 2023, for subscription and close on Thursday, December 21, 2023. Investors can bid for a minimum of 17 Equity Shares and in multiples of 17 Equity Shares thereafter.

The public issue of Equity Shares comprises of a fresh issuance of Equity Shares aggregating up to Rs. 4,000 million and an Offer for Sale (OFS) of up to 7,159,920 Equity Shares.

HFL, a company through their vertically integrated operations and with over 40 years of experience in manufacturing and supplying quality and complex components according to customers specifications, are engaged in engineering, process design, testing, manufacturing, and supply of a variety of components that are both margin-accretive and value-additive components. 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 (Source: Ricardo Report).

HFL primarily serves domestic and global original equipment manufacturers (“OEMs”), manufacturing commercial vehicles in the automotive sector, while in the non-automotive sector, they cater to 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.

The Company owns and operate three manufacturing facilities, of which two are located at Kanganwal in Ludhiana, Punjab and one is located at Dugri in Ludhiana, Punjab. The annual aggregate installed capacity for forging and machining stands at 120,000.00 MT and 47,200.00 MT as of September 30, 2023, respectively.

HFL’s focus on producing margin accretive value-added products has led to its transition from being a forging led business to a machined components manufacturer.  The Company manufactures a wide range of heavy forged and machined products which include crankshafts, front axle beams, steering knuckles, differential cases, transmission parts, pinion shafts, suspension products and valve bodies across industries for a diversified base of customers.

HFL’s revenue from operations increased by 39.12% to ₹11,965.30 million in Fiscal 2023 from ₹8,600.46 million in Fiscal 2022. Restated profit after tax increased from ₹1,422.89 million in Fiscal 2022 to ₹2,087.01 million in Fiscal 2023.

For the six months ended September 30, 2023, the revenue from operations stood at ₹6,729.00 million and restated profit for the period stood at ₹1,192.99 million.

JM Financial Limited, Axis Capital Limited, Equirus Capital Private limited and Motilal Oswal Investment Advisors Limited are book running lead managers and Link Intime India Private Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.

The Issue is being made through the Book Building Process, wherein not more than 50% of the Issue shall be available for allocation on a proportionate basis to Qualified Institutional Buyers, not less than 15% of the Issue shall be available for allocation to Non-Institutional Bidders and not less than 35% of the Issue shall be available for allocation to Retail Individual Bidders.

LISTING: The Equity Shares offered through the RHP are proposed to be listed on the Stock Exchanges. Our Company has received ‘in-principle’ approvals from BSE and NSE for the listing of the Equity Shares pursuant to letters dated September 12, 2023 and September 13, 2023, respectively. For the purposes of the Offer, NSE is the Designated Stock Exchange. A copy of the RHP has been filed and the Prospectus shall be filed with the Registrar of Companies, Punjab and Chandigarh at Chandigarh (“RoC”)  in accordance with Sections 26(4) and 32 of the Companies Act, 2013. For details of the material contracts and documents available for inspection from the date of the RHP until the Bid / Offer Closing Date, see “Material Contracts and Documents for Inspection” on page 509 of the RHP.  

DISCLAIMER CLAUSE OF SECURITIES AND EXCHANGE BOARD OF INDIA(“SEBI”): SEBI only gives its observations on the offer documents and this does not constitute approval of either the Offer or the specified securities stated in the Offer Document. The investors are advised to refer to page 448 of the RHP for the full text of the disclaimer clause of SEBI.  

DISCLAIMER CLAUSE OF BSE: It is to be distinctly understood that the permission given by BSE Limited should not in any way be deemed or construed that the RHP has been cleared or approved by BSE Limited nor does it certify the correctness or completeness of any of the contents of the RHP. The investors are advised to refer to the page 454 of the RHP for the full text of the disclaimer clause of BSE.  

DISCLAIMER CLAUSE OF NSE (the Designated Stock Exchange): It is to be distinctly understood that the permission given by NSE should not in any way be deemed or construed that the Offer Document has been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the Offer Document. The investors are advised to refer to page 454 and 455 of the RHP for the full text of the disclaimer clause of NSE.  

RHP Link: https://www.sebi.gov.in/filings/public-issues/dec-2023/happy-forgings-limited-rhp_79787.html

Disclaimer: HAPPY FORGINGS LIMITED is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to make an initial public offer of its Equity Shares and has filed a draft red herring prospectus dated August 14, 2023 with SEBI (the “DRHP”) and a red herring prospectus (the “RHP”) dated December 9, 2023 with the RoC. The RHP is made available on the website of the SEBI at www.sebi.gov.in as well as on the website of the BRLMs i.e., JM Financial Limited at www.jmfl.com; Axis Capital Limited at www.axiscapital.co.in, Equirus Capital Private Limited at www.equirus.com and Motilal Oswal Investment Advisors Limited at www.motilaloswalgroup.com, the website of the NSE at www.nseindia.com and the website of the BSE at www.bseindia.com and the website of the Company at www.happyforgingsltd.com. Any potential investor should note that investment in equity shares involves a high degree of risk and for details relating to such risks, please see the section titled “Risk Factors” beginning on page 36 of the RHP. Potential investors should not rely on the DRHP for making any investment decisions instead investors shall rely on RHP filed with the RoC.

The Equity Shares offered in the Offer have not been and will not be registered under the U.S. Securities Act of 1933, as amended (“U.S. Securities Act”), or any state law of the United States and, unless so registered, may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable state securities laws. Accordingly, the Equity Shares are being offered and sold (i) within the United States only to persons reasonably believed to be “qualified institutional buyers” (as defined in Rule 144Aunder the U.S. Securities Act) under Section 4(a) of the U.S. Securities Act, and (ii) outside the United States in “offshore transactions” as defined in and in compliance with Regulation S under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers and sales are made. There will be no public offering of the Equity Shares in the United States.