Hariom Pipe Industries IPO Review 2022: Hariom Pipe Industries Limited is coming up with its Initial Public Offer (IPO) which will open for subscription on March 30th, 2022, and closes on April 5th, 2022.
The company is looking to raise Rs. 130.05 Crores through the IPO. In this article, we take a closer look at the Hariom Pipe Industries IPO Review 2022 and its possible future prospects. Keep Reading to find out!
Table of Contents
Industry Overview
India is the second-largest steel producer globally. Steel consumption in India is widely attributed to the infrastructural and construction industry.
The steel sector in India is experiencing vital growth and is anticipated to witness high gains over the next few years.
The major reason for the positive prospects of the steel pipe market is the rise in demand from the oil and gas industry. This is because the pipes are being replaced at an exceptional rate.
Pre-insulated pipes are also gaining popularity, which will drive steel pipe demand in the country.
The pre-insulated pipes, also known as bonded pipes or insulated pipes, are utilized for maintaining the temperature of fluid present inside.
It is anticipated that from 2021 to 2026, the demand for steel would be majorly driven by growth in the construction and automotive sectors.
About The Company
Hariom Pipe Industries Ltd. (HPIL) is an integrated manufacturer of Mild Steel (MS) Pipes, Scaffolding, HR Strips, MS Billets, and Sponge Iron. The company uses a cost-effective process to manufacture MS Pipes and Scaffolding using iron ore.
Hariom Pipe Industries operates two plants, one at Mahabubnagar District in Telangana (Unit I) that manufactures finished steel products from iron scrap and sponge iron, and the second plant at Anantapur District, Andhra Pradesh (Unit II) that only manufactures Sponge Iron.
The company has a stronghold on steel products with a wide distribution network across India and especially in South and Western India. They have a very strong distribution network of 1,400 distributors and 1,500 points of sales.
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The Major Competitors Of The Company
Financial Snapshot
Strengths Of The Company
- The company has an integrated nature of the operation as it uses raw materials across various stages to manufacture final products.
- They have strategic locations of manufacturing units with strong connectivity
- The company has a low cost of manufacturing and the advantage of competitive pricing
- They have installed pollution control equipment in their plants to make their manufacturing environment friendly
- Experienced management and qualified team of professionals
Weaknesses Of The Company
- The company’s sales are reliant on a large small consumers base
- The company does not have any long-term agreements with its customers. Any sudden change in demand can impact their business
- There are multiple legal proceedings pending against the company including its Promoters and certain Directors
- The demand and pricing in the steel and steel products industry are volatile and are sensitive to the cyclical nature of the industries it serves
- The company has contingent liabilities amounting to Rs 606 Lakhs which are not accounted for in their financial statements
Key IPO Information
Promoters: Rupesh Kumar Gupta And Sailesh Gupta
Book Running Lead Managers: ITI Capital Limited
Registrar to the issue: Bigshare Services Private Limited
| Particulars | Details |
|---|---|
| IPO Size | ₹130.05 Cr |
| Fresh Issue | ₹130.05 Cr |
| Offer for Sale (OFS) | - |
| Opening date | March 30, 2022 |
| Closing date | April 5, 2022 |
| Face Value | ₹10 per equity share |
| Price Band | ₹144 to ₹153 per equity share |
| Lot Size | 98 Shares |
| Minimum Lot Size | 1 |
| Maximum Lot Size | 13 |
| Listing Date | April 13, 2022 |
The Objective Of The Issue
- Funding capital expenditure requirements
- Funding the working capital requirements
- General corporate purposes
In Closing
In this article, we covered the Hariom Pipe Industries IPO Review 2022. For investors, it can be a good opportunity to look into the company and apply for the IPO after analyzing its strengths and weaknesses of the company.
Saurabh Joshi, Research Analyst at Marwadi Financial Services has assigned a ‘Subscribe (With Caution)’ rating.
He said “Considering the FY22 (Annualised) /FY21 EPS of ₹10.10/5.94 on a post-issue basis, the company is going to list at a P/E of 15.14x/25.76x with a market cap of ₹389.80 crores whereas its peers namely JTL Infra and APL Apollo Tubes are trading at a PE multiple of 30.5 and 44.3 respectively.
Are you applying for the IPO? Let us know in the comments below. Happy Investing!
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