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Shares of Happy Forgings made a decent debut at the bourses on Wednesday. As against the IPO price of ₹850, the stock was listed at ₹1,001.85 and rose further to hit a high of ₹1,087 on the BSE. The stock then turned volatile to hit a low of ₹961 before closing at ₹1,029.80, up 21.15 per cent over the IPO price.
On the NSE, the stock closed 21.18 per cent higher at ₹1,030.10.
Happy Forgings presents a mixed bag for investors. The lower-than-expected listing raises concerns, but the decent gain and strong fundamentals offer a counterpoint, says Shivani Nyati, Head of Wealth, Swastika Investmart Ltd. “Given the uncertainty surrounding the listing, a cautious approach is recommended,” she said.
Happy Forgings received overwhelming response from all category of investors. The IPO, which was subscribed 82.04 times overall, saw retail investors receiving bids for 15.09 times, while that of non-institutions — generally referred to as high-networth individuals — got subscribed 62.17 times. Qualified institutions were the most aggressive, as the QIB portion was subscribed a whopping 220.48 times.
Happy Forgings IPO comprised of a fresh issue worth ₹400 crore and an offer-for-sale worth ₹608.60 crore.
The company proposes to use the proceeds for the purchase of equipment, plant and machinery, the prepayment of all or a portion of certain outstanding borrowings is availed by the company, and for general corporate purposes.
Ahead of the IPO opening, Happy Forgings had allotted about 35.60 lakh shares at ₹850 a share to 25 anchor investors, raising ₹303 crore.
Global investors such as Fidelity International, Neuberger Berman, Morgan Stanley, Janchor Partners, WhiteOak Capital, Eastbridge Capital and Kotak Offshore participated in the anchor book. As many as 14 mutual funds, including SBI Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund, Nippon India Mutual Fund, Kotak Mahindra Mutual Fund, Aditya Birla Sun Life Mutual Fund, Axis Mutual Fund, DSP Mutual Fund, Edelweiss Mutual Fund, Canara Robeco Mutual Fund, Invesco Mutual Fund, Motilal Oswal Mutual Fund, Quant Mutual Fund and HSBC Mutual Fund, and long with insurance companies such as SBI Life Insurance, ICICI Prudential Life Insurance, HDFC Life Insurance and Birla Life Insurance also participated.
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