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Hariom Pipe Industries Subscribed 42% On Day 1 So Far


Hariom Pipe Industries has set the bank a price of Rs 144-153 per equity share.

New Delhi:

Hariom Pipe Industries ’initial public offering (IPO) opens for subscription on Wednesday. As of 12:29 p.m., the sale of the shares received 35.39 lakh bids compared to the total size of 85 lakh shares on the first day of issuance, subscribing for 42 per cent. The Rs 130.05 crore IPO will end on April 5, 2022.

The share of retail individual investors was booked 1.20 times, while the eligible institutional buyers (QIB) and non -institutional categories did not receive any subscriptions.

The Hyderabad-based company has set the bank a price of Rs 144-153 per equity share for a face value of Rs 10. Offers can be made for a minimum of 98 equity shares and in multiples of 98 equity shares thereafter.

Under the offer, 30 per cent of the issuance will be reserved for QIB and 35 per cent each for non -institutional and retail investors.

According to the draft paper, the net proceeds from the initial sale of shares will be used to fund its capital expenditures, working capital requirements as well as expenditures for general corporate purposes.

The company has a stronghold on its steel products with an extensive distribution network across India and especially in the southern and western regions.

It has a diverse product portfolio comprising mild steel billets (MS), pipes and tubes, hot rolled voil (HR) and scaffolding systems as well as catering to various end -use industries such as housing, infrastructure, agriculture, automotive, solar, fabrication and engineering.

Hariom Pipe plans to set up a new manufacturing plant at Sangareddy in Telangana with an estimated total installed capacity of 51,943 tonnes per annum.

For 2020-21 (FY21), its total revenue amounted to Rs 254.82 crore as compared to Rs 161.15 crore in the previous fiscal. Its net profit amounted to Rs 15.13 crore for the period as compared to Rs 7.90 crore in the previous financial year.

ITI Capital is the only lead manager running the books and Bigshare Services Private Ltd is the registrar of the issue.

Should You Buy?

“The company carries issues at a price band of Rs 144-153 per share at a price to equity (p/e) multiple of 16-17 times on a pre-issue 2020-21 (FY21) pre-issue earnings per share (eps) basis. The company with its integrated operating nature has environmentally friendly manufacturing processes with strategic manufacturing unit locations and competitive product pricing. Taking care of the company’s financial performance and valuation, the issuance looks good. Therefore, we recommend ‘Subscribe to the issue, “said brokerage firm Hem Securities.

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