IPO Report - Hariom Pipe Industries Limited By Swastika Investmart
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* Hariom Pipe Industries Limited manufactures iron and steel products including Mild Steel (MS) Pipes, Scaffolding, HR Strips, MS Billets, and Sponge Iron.
* As part of the B2B sales, the company sells MS Pipes and Scaffoldings to specific developers and contractors.
* Strengths: 1) Strategic location of manufacturing Units 2) Cost advantage in manufacturing the products 3) Competitive pricing of the products
* Risk: 1) Small Issue Size. 2) High Debt Equity ratio.
* Object of the Issue: 1) Funding of working capital requirement .
* The Offer comprises the Fresh Issue of Rs. 130.05 cr. The issue will open on March 30, 2022, and close on April 05, 2022. The issue is priced at %144 to 153 per equity share. The minimum order quantity is 98 shares.
* The revenue from operations has grown from Rs. 133.59 crores as on 31st March, 2019 to Re. 254.13 crores as on 31st March 2021. During the same period the PAT has grown from Rs. 8.02 crores to Rs. 15.13 crores..
* The company has a good distribution network, strong brand recall, vertically integrated plant and experienced promoter team.The issue is reasonably priced at a PE band of 13.5x to 14.3x FY21 EPS compared to its listed peers. Although the company has good fundamentals, the products are highly commoditized and competitive in nature. Thus, due to above factor and volatility in Operating Cash Flows, high Debt Equity ratio and small issue size, we assign Subscribe Rating for Aggressive Investors only.
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