The initial public offering (IPO) of Happy Forgings saw strong interest from investors as the company’s shares began trading on the stock exchanges today at a significant premium.
Happy Forgings is a manufacturer of forged and machined components. It had conducted an IPO last week to raise funds by selling shares to the public for the first time. The company offered its shares in the price range of Rs. 808 to Rs. 850 apiece.
The shares started trading on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) today under the symbol ‘HAPFORGE’. On NSE, Happy Forgings shares opened at Rs. 1001.25, which was 18% higher than the issue price of Rs. 850. On BSE, they debuted at Rs. 1000, also showing a premium of 18%.
This solid debut shows there was huge demand for Happy Forgings shares among investors. Many people who had applied for the initial public offering (IPO) during the bidding process last week would have made decent returns on the very first day of listing.
The strong listing is a contrast to expectations in the grey market prior to trading. In the unofficial market for unlisted securities, Happy Forgings shares had been commanding a premium of around Rs. 240-250 over the IPO price last week. This indicated the expected gain for investors would be around 28-30% upon listing.
However, the premium rose as high as Rs. 450 in the grey market in the days right before bidding closed. So the actual 18% premium at listing is less exciting than what was foreseen according to unofficial trading.
Still, the fact Happy Forgings debuted at over 17.5% higher than investors paid during the IPO will please those who applied for the shares. It signals continued strong investor enthusiasm for the company.
The Rs. 1008.59 crore IPO received an overwhelming response from institutional and retail buyers during the bidding period between December 19-21. The portion set aside for qualified institutional bidders was oversubscribed by 220 times while that for non-institutional bidders saw 62 times subscription. Even retail investors bid 15 times the portion reserved for them.
The company manufactures critical components for sectors including automotive, construction, wind energy, and railways. Its three state-of-the-art manufacturing plants are located in Ludhiana, Punjab. Happy Forgings supplies products to well-known domestic and international original equipment manufacturers. With Happy Forgings receiving positive market acceptance on day one of trading, it will be interesting to see how its stock price performs going forward from this solid start.
