Hariom Pipe Industries Limited IPO
(i) Hariom is an integrated manufacturer of Mild Steel (MS) Pipes, Scaffolding, HR Strips, MS Billets, and Sponge Iron. They use iron ore to produce Sponge Iron which is then processed across various stages to manufacture its final products viz. MS Pipes and Scaffolding making its manufacturing process cost-effective.
(ii) They cater to the southern and western Indian markets for its products. Their MS Pipes are marketed and sold in these geographies under the brand name “Hariom Pipes”. Substantial portion of the Sponge Iron, MS Billets and HR Strips produced by them are used for captive consumption in the manufacturing MS Pipes and Scaffolding.
(iii) Hariom Pipe manufacture MS Pipes and Scaffoldings of more than one hundred fifty (150) different specifications and cater, directly and indirectly, to customer requirements in various sectors such as housing, infrastructure, agriculture, automotive, power, cement, mining, solar power and engineering.
(iv) They mainly sell MS Pipes through more than two hundred (200) distributors and dealers. They also sell MS Pipes and Scaffoldings to certain developers and contractors directly as B2B sales.
(v) Their integrated plant at Mahabubnagar District in Telangana (Unit I) manufactures finished steel products from iron scrap and Sponge Iron and the other plant at Anantapur District, Andhra Pradesh (Unit II) exclusively manufactures Sponge Iron. Unit II is located near Bellary, which is one of the hubs in South India for iron ore production. The iron ore required to produce Sponge Iron at Unit II is mostly procured through the online bidding process. Most of the Sponge Iron produced at the Unit II is transported to the Unit I and used as a raw material for manufacturing MS Billets, HR Strips, MS Pipes and Scaffolding. The manufacturing of Sponge Iron at our Unit II has reduced the dependence of Hari-OM Pipes on external sources for raw materials since its acquisition in September, 2020. The integration of Unit I and II has optimized our operations and profitability through backward integration which helps with efficient logistics, inventory management, procurement, energy savings and quality control.
- Experienced & Qualified Team:
- Complimentary product mix
- Expected High Operating Efficiency
- Location of the Manufacturing Unit
- Product diversification & Wide Product Offering
- Integrated nature of our operations.
- Environment-friendly manufacturing process.
- The strategic location of manufacturing Units.
- Cost advantage in manufacturing our products.
- Competitive pricing of our products.
- Experienced & Qualified Team.
Objects of the Hariom Pipe Industries Limited IPO:
Hariom Pipe Industries Limited IPO Details:
|Open Date:||Mar 30 2022|
|Close Date:||Apr 05 2022|
|Face Value:||₹ 10 Per Equity Share|
|Issue Type:||Book Built Issue IPO|
|Issue Size:||130.05 Cr.|
|Lot Size:||98 Shares|
|Issue Price:||₹ 144 - 153 Per Equity Share|
|Listing Date:||Apr 13 2022|
Promoters And Management:
Financials of Hariom Pipe Industries Limited IPO:
|Particulars (in Lakhs)||Sep-21||Mar-21||Mar-20||Mar-19|
|Cost of Materials Consumed||15,054||18,032||10,953||8,409|
|Changes in Inventories||-1,523||-746||-1,887||6|
|Employee Benefits Expense||989||951||830||581|
|Power & Fuel||2,725||3,381||3,655||2,519|
|Profit before tax||1,771||2,120||1,132||1,165|
|Total Tax Exps||484||607||342||363|
|No. of shares||254.76||254.76||254.76||254.76|
|EPS in Rs||15.12||10.64||5.98||7.34|
Comparison With Peers:
|Name of the Company||Face Value||EPS||PE||RoNW||Book Value||Sales (In Cr)||PAT (In Cr)|
|Hariom Pipe Industries Limited||10||10.64||14.38||21.38%||49.79||254||15|
|APL Apollo Tubes Ltd||2||20.6||45.2||23.60%||78.9||8500||360|
|Hi-Tech Pipes Ltd||10||30.8||16.8||12.20%||201||1341||23|
|Rama Steel Tubes Ltd||5||16.4||19.5||13.20%||67.8||470||12|
|JTL Infra Ltd||2||8.22||30.8||28.20%||21.3||435||20|
Recommendation on Hariom Pipe Industries Limited IPO:
Review and Recommendation of HariOM Limited IPO by InvestorZone is 5/101. Hari-OM Pipe is a Hyderabad based company, engaged in manufacturing of iron and steel products. The company has evolved into an integrated steel manufacturer with a stronghold in the South Indian market under the brand name "Hariom Pipes". 2. The manufacturing units are located strategically in Hyderabad which is close to Industrial area. Plus they have done backward integration till sponge iron stage of manufacturing. This help company to save cost and able to provide products at lower cost in the market. 3. The demand of steel for next 5 years will be driven by growth in the construction and automotive sectors. Steel is used as alloy in automotive applications, and beams and pillars in construction works. So, as both sectors grows, the demand will increase for steel too. 4. The IPO is priced at P/E of 20x based on FY21 earnings.