Hariom Pipes IPO Review: 2021 witnessed 63 Indian companies (highest in a decade) tap into the initial public offer (IPO) market.
Hariom Pipe Industries IPO opened for subscription on 30 March 2022.
Hariom Ind. is the manufacturer of steel products and it is looking to raise about ₹1.3 bn by offering 8.5 m fresh equity shares.
Hariom Pipes IPO Review | Hariom Pipes IPO Subscription Status
Here are Hariom Pipes IPO Details:
|Issue Period||30 March 2022 to 5 April 2022|
|IPO Size||₹1.30 bn|
|Price Band||₹144 to ₹153 per equity share|
|Bid Lot||98 shares and in multiples thereof|
|Face value||₹10 per equity share|
|Stock Listed On||BSE And NSE By 13 April 2022|
The object of the issue: To fund its capital expenditure, working capital requirements and expenses for general corporate purposes.
Top 5 Key Points You Must Know About Hariom Pipe Industries IPO
#1 About the company
Headquartered in Hyderabad, Hariom is a small-sized but backward integrated manufacturer of Mild Steel (MS) Pipes, Scaffoldings, Hot Rolled (HR) Strips, MS Billets, and sponge iron.
The company caters to diverse end-use industries like infrastructure, automotive, housing, agriculture, solar, fabrication, and engineering.
Currently, the manufacturing process is split between 2 plants: unit I in Mahabubnagar District, Telangana, and unit II in Anantapur District, Andhra Pradesh.
Unit II is dedicated to manufacturing sponge iron and is strategically located near Bellary, a hub for iron ore production in South India. Iron ore is mainly procured through the online bidding process.
Unit I converts sponge iron and iron scrap into finished steel products. The company’s USP lies in its wide range of product specifications and customisation.
The company has a strong network of dealers and distributors (around 200) in the southern and western regions of India. Sales to certain developers and contractors are also done directly via business-to-business (b2b).
#2 Financials at a Glance
For the financial year ended March 2021, the company’s revenues were up nearly 60%.
The net profit margin came approx 6% and the bottom line almost doubled from ₹79.1 m (the financial year 2020) to ₹151.3 m.
#3 Peer Comparison
APL Apollo Tubes, Hi-Tech Pipes, Rama Steel Tubes, and JTL Infra, among others, are the company’s listed industry competitors.
#4 Arguments in favour of the business
The company’s synchronised manufacturing process leads to cost and time efficiencies.
#5 Risk Factors
The demand for steel products is volatile as it serves cyclical industries like housing and automobile.
Raw materials and stores consumed accounted for 77.2% of total expenses for the fiscal year 2021. Volatility in prices of energy and raw materials like iron ore, iron ore fines, scrap, and power directly affects profitability.
Income source concentration: 60.7% and 49.8% of revenue from operations were represented by the top 10 customers during the fiscal years 2021 and 2020, respectively.
Outstanding legal proceedings involving the company, promoters, and certain directors
Absence of exclusive distribution arrangements: Deficiency in services provided by any channel partner leading to payment delays or defaults.
Hariom Pipes IPO Subscription Status as of 5 April 2022 (Last Day)
Overall, the issue was subscribed 4.15 times on the last day of IPO.