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Happy Forgings IPO subscribe or not : A Comprehensive Analysis

1. Brief Introduction of of Happy Forgings Ltd

Happy Forgings IPO, set to raise Rs 1,008.59 crores, is a significant event in the financial landscape. This article delves into the IPO details, company background, and whether investors should consider subscribing.

2. IPO Timeline of Happy Forgings Ltd

The IPO bidding began on December 19, 2023, and concludes on December 21, 2023. Allotment is expected on December 22, 2023, with a tentative listing date of December 27, 2023.

3. IPO Price Band and Lot Size of Happy Forgings Ltd

Investors should note the price band of ₹808 to ₹850 per share and the minimum lot size of 17 shares. Retail investors must invest a minimum of ₹14,450.

4. Company Background & Financial Performance of of Happy Forgings Ltd

Happy Forgings Ltd. (HFL) stands as the fourth-largest engineering-led manufacturer in India, specializing in complex and safety-critical components. This section explores its market position.

 Business Operations

HFL is engaged in engineering, testing, manufacturing, and supply of various components. This section details the core activities that make HFL a significant player in the industry.

Market Catering

Exploring HFL's market presence in the automotive and non-automotive sectors, this section sheds light on its diversified customer base.

Capacity and Manufacturing of Happy Forgings Ltd

HFL's impressive forging capacity and transition to machined components are discussed here, showcasing its adaptability and industry standing.

Product Range of  Happy Forgings Ltd

A closer look at the extensive range of heavy forged and machined products, including crankshafts, front axle beams, and suspension products.

 Experience and Industry Position of Happy Forgings Ltd

With over 40 years of experience, HFL has emerged as a leading player in crankshaft manufacturing. This section outlines its journey and current standing.

Financial Performance of Happy Forgings Ltd: An In-depth Analysis

Happy Forgings Ltd. (HFL) has exhibited a commendable financial performance over the last three fiscal years, showcasing resilience and growth. Here's a comprehensive overview:

Total Income and Net Profit (in Crores)of Happy Forgings Ltd:

FY21 (Standalone): rs509.81 / rs86.45

FY22 (Consolidated): rs866.11 / rs142.29

FY23 (Consolidated): rs1202.27 / rs208.70

H1 FY24 (Standalone): rs119.30 / rs675.73

Standalone vs. Consolidated Data Clarification of Happy Forgings Ltd:

HFL faced confusion due to a pending JV approval, leading to the use of the Consolidated tag for FY22 and FY23. The data, however, represents standalone figures. Approval received last month clarifies the standalone nature, and financial data should be considered standalone until the JV is finalized.

Earnings per Share (EPS) and Return on Net Worth (RoNW) of Happy Forgings Ltd:

Average EPS (last three fiscals of Happy Forgings Ltd): 18.57

Average RoNW: 18.82%

Happy Forgings Ltd IPO Pricing and Valuation:

Price to Book Value (P/BV) of Happy Forgings Ltd:

Based on NAV (Sep 30, 2023): 6.89

Post-IPO NAV (Upper cap): 5.33

Post-IPO Earnings and Pricing of Happy Forgings Ltd:

FY24 annualized earnings attribute to post-IPO fully diluted paid-up equity capital, resulting in a Price to Earnings (P/E) of 33.56. The IPO is considered reasonably priced.

Profit After Tax (PAT) and Return on Capital Employed (RoCE) Margins of Happy Forgings Ltd:

FY21: 14.78% (PAT), 16.13% (RoCE)

FY22: 16.54% (PAT), 19.38% (RoCE)

FY23: 17.44% (PAT), 24.24% (RoCE)

H1 FY24: 17.73% (PAT), 12.21% (RoCE)

Dividend Policy of Happy Forgings Ltd:

Declared a substantial dividend of 65% for the period from April 01, 2023.

Adopted a dividend policy in July 2023, reflecting confidence in financial performance and future prospects.

In summary, Happy Forgings Ltd.'s financial trajectory demonstrates stability, growth, and a strategic approach, making it an intriguing prospect for investors.

 Why Consider Happy Forgings IPO

Highlighting the strengths of HFL as an investment, including its global OEM partnerships and steady growth in top and bottom lines.

Investment Analysis of Happy Forgings Ltd

An in-depth analysis for potential investors, considering the reasonably priced issue based on FY24 annualized earnings and the medium to long-term rewards.

 Conclusion on  Happy Forgings Ltd

Summarizing the key points, this section provides a concise overview and encourages potential investors to consider Happy Forgings IPO.

 FAQs on of Happy Forgings IPO

Q1: What is the minimum investment for retail investors?

A: Retail investors must invest a minimum of ₹14,450 in the Happy Forgings IPO.

Q2: When will the IPO be listed?

A: The tentative listing date for Happy Forgings IPO is December 27, 2023.

Q3: What is the price band per share?

A: The price band for Happy Forgings IPO is set at ₹808 to ₹850 per share.

Q4: What is the minimum lot size for application?

A: The minimum lot size for an application is 17 shares.

Q5: What is the business focus of Happy Forgings Ltd.?

A: HFL is focused on engineering, process design, testing, manufacturing, and supply of complex and safety-critical components.

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