The offer received bids for 56.67 lakh shares as against 85 lakh shares on offer.
The initial public offer (IPO) of Hariom Pipe Industries received bids for 56,67,536 shares as against 85,00,000 shares on offer, according to stock exchange data at 17:00 IST on Wednseday (30 March 2022). The issue was subscribed 67%.
The issue opened for bidding on Wednesday (30 March 2022) and it will close on Tuesday (5 April 2022). The price band of the IPO is fixed at Rs 144 - 153 per share. An investor can bid for a minimum of 98 equity shares and in multiples thereof.
The offer comprises fresh issue of 85,00,000 equity shares with Rs 130.10 crore at upper price band of Rs 153 and Rs 122.40 crore at lower price band of Rs 144. The company proposes to utilize the net proceeds from the issue towards funding capital expenditure requirements amounting Rs 50.05 crore, funding the working capital requirements amounting Rs 40 crore and balance towards general corporate purposes.
The company is setting up two additional pipe mills adjacent to the Unit I which will increase its production capacity from 84,000 MTPA to 1,32,000 MTPA. Further, it will be undertaking expansion of its existing furnace capacity by setting up of a new 15 tonne electric melting furnace at its existing unit thereby enhancing production capacity to the extent of 1,04,232 MTPA from the existing capacity of 95,832 MTPA. This expansion will ensure the availability of primary raw materials i.e. an MS billet which is used in the production of HR strips.
HR strips are used as main raw material in pipe mills. This new electric melting furnace will also help in ensuring availability of HR strips for its additional pipe mills. The board in its meeting as on 2 September 2021, had approved an amount of Rs 50.05 crore for funding the proposed capital expenditure from the net proceeds. The company had applied with Telangana State Pollution Control Board (TSPCB) for enhancement of the licensed capacity of Unit I from 1,26,000 MTPA to 6,86,400 MTPA and the same has been obtained from TSPCB on 28 July 2021.
HariomPipe Industries is an integrated manufacturer of mild steel (MS) pipes, scaffolding, HR (hot rolled) strips, MS billets and sponge iron. The company uses iron ore to produce sponge iron which is then processed across various stages to manufacture final products viz. MS pipes and scaffolding.
The company has two manufacturing units located in and around key industrial hubs that provides it with certain advantages over peers, like ease of logistics and adequate supply of power, water, raw materials, and manpower.
The Unit I is an integrated plant located in Mahabubnagar district in Telangana, which is in proximity to Hyderabad and the Jadcherla industrial area and manufactures finished steel products from iron scrap and sponge iron. Unit II exclusively manufactures sponge iron and is in Anantapur district in Andhra Pradesh, which is around eighteen 18 km away from Bellary, one of the hubs in South India for iron ore production. The company had acquired sponge iron Unit situated at, Anantapur in August 2020 with a capacity of 36,000 MTPA.
The iron ore required to produce sponge iron at Unit II is mostly procured through the online bidding process. Most of the sponge iron produced at the Unit II is transported to the Unit I and used as a raw material for manufacturing MS billets, HR strips, MS pipes and scaffolding.
The company reported a net profit of Rs 12.87 crore and total income of Rs 200.87 crore for the six months ended September 2021.
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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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