Happy Forgings Limited IPO

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  1. Core Business and Ranking:
    • The company is the fourth largest in India for engineering-led manufacturing of complex and safety-critical components, specifically heavy forged and high-precision machined components.
    • The ranking is based on forgings capacity, as reported in the Ricardo Report.
  2. Vertical Integration and Operations:
    • The company engages in vertically integrated operations, covering engineering, process design, testing, manufacturing, and supply of various components.
    • The operations focus on producing margin-accretive and value-additive components.
  3. Target Market and Clients:
    • The primary customer base includes domestic and global original equipment manufacturers (OEMs) in the automotive sector, particularly those manufacturing commercial vehicles.
    • In the non-automotive sector, the company serves manufacturers of farm equipment, off-highway vehicles, and industrial equipment and machinery for various industries, including oil and gas, power generation, railways, and wind turbines.
  4. Crankshaft Manufacturing Expertise:
    • The company has over 40 years of experience and has emerged as a leading player in the domestic crankshaft manufacturing industry.
    • It boasts the second-largest production capacity for commercial vehicle and high-horsepower industrial crankshafts in India, according to the Ricardo Report.
  5. Transition to Machined Components:
    • The company has transitioned from being a forging-led business to a manufacturer of machined components.
    • Revenue from the sale of machined products has shown substantial growth, representing a significant portion of the total revenue.
  6. Financial Performance:
    • Revenue from operations has increased significantly, recording a 104.55% increase from Fiscal 2021 to Fiscal 2023.
    • The focus on value addition through higher machining intensity has contributed to increased realization and improved EBITDA margins, outperforming peers in the last two fiscal years.
  7. Product Range:
    • The company manufactures a diverse range of heavy forged and machined products, including crankshafts, front axle beams, steering knuckles, differential cases, transmission parts, pinion shafts, suspension products, and valve bodies.
  8. Capability in Safety-Critical Components:
    • The company is highlighted as one of the few in India capable of manufacturing and supplying high-precision safety-critical components to leading OEMs in various industries.
  9. Revenue Breakdown:
    • The overview mentions tables providing a breakdown of revenue from the sale of products to automotive and non-automotive sectors for specified periods.

Objects of the Happy Forgings Limited IPO:

The Company proposes to utilise the Net Proceeds from the Fresh Issue towards funding the following objects: i. Purchase of equipment, plant and machinery. ii. Prepayment of all or a portion of certain outstanding borrowings availed by the Company and iii. General corporate purposes.

Happy Forgings Limited IPO Details:

Open Date: Dec 19 2023
Close Date: Dec 21 2023
Total Shares: 11858823
Face Value: ₹ 2 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 1008 Cr.
Lot Size: 17 Shares
Issue Price: ₹ 808 to ₹850 Per Equity Share
Listing At: NSE,BSE
Listing Date: Dec 27 2023

Financials of Happy Forgings Limited IPO:

Particulars ( In Crore )
Revenue from Operations 585 860 1,197 673
Other Income 6 6 6 3
Total Revenue 591 866 1,202 676
Cost of material consumed 257 436 548 321
Changes in Inventories -6 -47 3 -26
Employee benefits expenses 49 69 88 54
Other Expenses 126 172 217 128
EBITDA 165 237 347 198
Depreciation & Amortisation 36 38 54 32
Finance Cost 12 7 12 7
EBIT 129 199 293 166
OPM (%) 27.86% 27.35% 28.84% 29.30%
PBT 117 192 280 159
Tax 31 50 71 40
PAT 86 142 209 119
NPM (%) 14.63% 16.43% 17.36% 17.65%
No.of Shares 9.42 9.42 9.42 9.42
EPS 9.17 15.10 22.15 12.66

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Happy Forgings Limited 1,197 209 22.15 38.4 850 8,007
Bharat Forge Limited 12,910 508 11.35 85.5 1,202 55,964
Craftsman Automation Limited 3,183 251 117.56 37.4 5,282 11,159
Ramkrishna Forgings Limited 3,193 248 15.52 46.8 752 13,594
Sona BLW Precision Forgings Limited 2,676 395 6.75 70.2 565 33,134
* All the data is as per FY23.

Recommendation on Happy Forgings Limited IPO:

Review and Recommendations of Happy Forging IPO by IZ team is 5/10

IPO Objective

a) Planning to raise ₹1,008 crores through an IPO. b) Aims to use the proceeds to repay debt, fund capital expansion, and for general corporate purposes. c) Post-IPO, the promoter's holding will drop to 88.98%.

Business Model

a) Ludhiana-headquartered Happy Forgings is India's fourth-largest forgings and machined components maker. b) The share of machined parts, which enjoys higher margins, is increasing in the company's total value base. c) Export accounted for 20% of revenue in FY24. d) Capacity for high-precision crankshafts that cater to diverse applications.


a) Sales to commercial vehicle customers account for 49% of revenue, and off-highway equipment (37%), and automotive industry customers include Maruti Suzuki India, Mahindra & Mahindra, Ashok Leyland, Dana India, JCB India, and Escorts. b) The company has an installed capacity of 120,000 tons of forging and 47,000 tonnes of machining with three plants in Punjab. c) Net profit expanded at 56% CAGR to ₹209 crore between FY21 and FY23. d) In the first half of FY24, it had revenue of ₹672 crore with an operating margin of 29% and profit of ₹119 crore.


a) High exposure to the commercial vehicle sector which is cyclical in nature and typically goes through an upcycle of 3-5 years, followed by 2-3 years of a downcycle. A prolonged downturn in the CV sector may weigh on its financials. b) The slowdown in the sector or loss of key customers may impact its financials.


a) At the upper end of the price band, the company is demanding a price-earnings multiple of 37 on the trailing 12-month earnings. b) Compared to peers, Ramkrishna Forgings (46.7 times) and Craftsman Automation (47.2 times), Happy Forgings appears to be trading at higher multiples.

Registrar of Happy Forgings Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Happy Forgings Limited B XXIX, 2254/1, Kanganwal Road, P.O. Jugiana, Ludhiana – 141 120, Phone: +91 161 5217162 Email: complianceofficer@ha ppyforgingsltd.co.in Websitehttp://www.happyforgingsltd.com/

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