HariOm Pipes IPO intends to raise Rs 130.05 crore by selling 8,500,000 fresh equity shares in the price range of Rs 144-153.

Issue Opens Wed, 30th March, 2022
Issue ClosesTue, 5th April, 2022
Issue typeFresh Issue of 8,500,000 Equity Shares
Face Value₹ 10
Issue Size (₹ Cr)₹ 122 – 130 Cr
Bid Lot98 shares
Price Band₹ 144 – 153
QIB30% of the offer
NIB35% of offer ( 2,975,000 Shares,  45.52 Cr)
Retail35% of offer ( 2,975,000 Shares,  45.52 Cr)
  • Hariom Pipe Industries Limited , is a Telangana based company which is into manufacturer of an integrated manufacturer of Mild Steel (MS), Scaffolding, HR Strips, MS Billets, Pipes, and Sponge Iron.
  • The company has evolved into an integrated steel manufacturer with a stronghold in the South Indian market and presence in Western India as well.
  • THe Unit I is an integrated plant located in Mahabubnagar District in Telangana, wand manufactures finished steel products from iron scrap and sponge iron.
  • The Unit II manufactures sponge iron and is in Anantapur District in Andhra Pradesh. It is close to Bellary, one of the centers in South India for iron ore production.
  • The company had acquired sponge iron unit with a capacity of 36,000 mtpa.. This is situated at, Anantapur in August 2020
  • The company aims to expand the MS pipes manufacturing capacity by setting up 2 additional pipe mills adjacent to the existing unit-I,.
  • This will increase the production capacity from the present 84,000MTPA to 1,32,000MTPA
  • Hariom Pipe Industries has more than 200 employees.
  • the company has 1400 plus Retailers distribution network, 150 plus manufacturing specification
  • 300832 MT manufacturing capacity
Particulars / (₹ In Cr)6mFY22Fy21Fy20Fy19
Revenue from Operations200.87254.14160.78133.6
Revenue Growth (%)58.07%20.34%
EBITDA25.8634.9723.8617.35
EBITDA Margin (%)12.86%13.72%14.81%12.95%
Profit before Tax17.7121.211.3311.65
Net Profit for the period12.8715.137.918.02
Net Profit Margin (%)6.40%5.94%4.91%5.99%
EPS -Basic (₹ ) as stated15.12^10.645.987.34
Equity Share Capital16.9816.9613.2313.23
Net worth as stated83.7270.7948.336.09
RoNW (%)15.37%21.38%16.37%22.22%
Share capital post IPO25.48
FV10
IPO Price153
EPS ( FY21)5.94
PE( based on Fy21)25.77
EPS (FY22 ann)10.10
PE (FY22 ann)15.15
Market Cap390
Market Cap / Sales 1.53
  • On FY22 annualized financials, the IPO is valued 1.2x EV/sales and 15x P/E.
  • Hariom Pipes looks set to maintain has the potential to maintain its double-digit growth.
Peers
Name of the CompanyFY2 sales in crPAT (In Cr)NPMFace ValuePERoNW
Hariom Pipe Industries Limited254155.9%101521.38%
APL Apollo Tubes Ltd85003604.2%246.623.60%
Hi-Tech Pipes Ltd1341231.7%1017.4112.04%
Rama Steel Tubes Ltd470122.6%512.3813.19%
JTL Infra Ltd435204.6%23128.20%
  • Hariom Pipes is smaller compared to peers but has good profitability and Return on Net worth compared to peers.
  • It is rated BBB+. The Debt equity ratio of will shrink to a 0.4:1 after IPO. Gross debt of Rs. 88 cr will however remain post IPO.
  • Hariom Pipes prospects looks reasonably good due to integrated nature of operations, capacity expansion, locational advantages, extensive distribution network, decent financials, and valuation compared to peers. In nutshell small player but looks reasonable.

Hariom Pipe Industries IPO: Apply or Not

Risk  :  Low

Expected Reward   : Moderate to Fair. Some chances of low loss if markets are too bearish. 

Listing Gains  :   Reasonable Chances.

Hold for Medium/ Long Term:  Looks OK to me.

Subscription  :  Expected to be Good

I am likely to apply in this IPO.

Above are my views only. Please do your own diligence.

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