About the Company:
Hariom is an integrated manufacturer of Mild Steel (MS) Pipes, Scaffolding, HR Strips, MS Billets, and Sponge Iron.
Company use iron ore to produce Sponge Iron which is then processed across various stages to manufacture the final products viz. MS Pipes and Scaffolding making the manufacturing process cost-effective.
Company caters to the southern and western Indian markets, Company’s MS Pipes are marketed and sold in these geographies under the brand name “Hariom Pipes”.
Substantial portion of the Sponge Iron, MS Billets and HR Strips produced by the company are used for captive consumption in the manufacturing MS Pipes and Scaffolding.
Company manufacture MS Pipes and Scaffoldings of more than one hundred fifty (150) different specifications and cater, directly and indirectly, to customer requirements in various sectors such as housing, infrastructure, agriculture, automotive, power, cement, mining, solar power and engineering.
Products manufactured by the Company:
- Sponge Iron.
- HR Strips.
- MS Section.
- MS Pipes & Tubes.
- Scaffolding.
The company is presently dealing with over 200 distributors and dealers in:
- Telangana.
- Andhra Pradesh.
- Karnataka.
- Tamil Nadu.
- Kerala.
- Maharashtra.
- Dadra & Nagar Haveli & Puducherry.
Company’s Manufacturing facilities:
Company’s integrated plant at Mahabubnagar District in Telangana (Unit I) manufactures finished steel products from iron scrap and Sponge Iron.
Company’s other plant at Anantapur District, Andhra Pradesh (Unit II) exclusively manufactures Sponge Iron. Unit II is located near Bellary, which is one of the hubs in South India for iron ore production.
The manufacturing of Sponge Iron at Unit II has reduced company’s dependence on external sources for raw materials since its acquisition in September, 2020.
The integration of Unit I and II has optimized company’s operations and profitability through backward integration which helps with efficient logistics, inventory management, procurement, energy savings and quality control.
Company’s Distribution Network:
Company mainly sell MS Pipes through more than two hundred (200) distributors and dealers.
Company also sell MS Pipes and Scaffoldings to certain developers and contractors directly as B2B sales.
Company’s key differentiator is the range of product specifications in terms of thickness, length, quality, availability and customised products.
Management Team:
- Mr. Pramod Kumar Kapoor (Designation: Chairman and Independent Director)
- Mr. Rupesh Kumar Gupta (Designation: Managing Director)
Company’s Promoters are third generation entrepreneurs and individually have more than a decade of experience in the iron and steel industry.
Objectives of the Issue:
Fresh Issue: (Rs.130 cr)
- Funding capital expenditure requirements.
- Funding the working capital requirements of the Company.
- General corporate purposes.
Fund Utilization:
| Particulars | Amount (Rs. in Crores) |
|---|---|
| Funding capital expenditure requirements | 50.05 cr |
| Funding the working capital requirements of the Company | 40 cr |
Positives for the Company:
Integrated nature of company’s operations.
- Company use iron ore to produce Sponge Iron which is then processed across various stages to manufacture final products viz. MS Pipes and Scaffolding making the manufacturing process cost-effective.
- The integrated nature of operations is one of the major strengths and differentiator of the Company.
- All intermediate products required for the manufacturing of final products are produced in-house viz. Sponge Iron, MS Billets and HR Strips.
- Company’s finished product from each of the process acts as an input for the next process and provides flexibility in alteration of product mix as per market demand and supply, market price and the available gross margins.
Cost advantage in manufacturing the products.
- Company has established a manufacturing process which keeps costs low, leading to a competitive price advantage as compared to others in the industry.
- Company has synchronized the processes in such a manner that one product follows the other without any break leading to costs and time efficiencies.
Competitive pricing of the products.
- Company is able to face competition from other industry players effectively as its products are a result of backward integration which leads up to the Sponge Iron stage of manufacturing.
- Backward integration has its owns cost and savings advantages which the competitors may be lacking giving company a competitive advantage as to price.
- In addition to the pricing advantage, company has also built in the manufacturing process some flexibility as to thickness, length and quality of the products which enables customisation leading to better margins for the products.
- Due to the flexibility in manufacturing a range of products having specific thickness, length and quality, the demand for company’s products is higher as compared to the competitors who manufacture and sell standard industry sizes or dimensions of products.
Expand the geographical network.
- Company is presently serving the markets of Southern and some parts in Western India.
- The distribution channels developed over the years have been critical to company’s growth.
- Company intends to continue developing and nurturing existing markets and creating new distribution channels in under and non-penetrated geographies.
Organic growth by expansion of the manufacturing capacity.
- Company has embarked on a phase of growth to build scale and expand its portfolio of value-added products.
- From the Net Proceeds of the Issue, company shall be deploying funds for expansion of the MS Pipe manufacturing capacity by setting up of two (2) additional pipe mills adjacent to the existing Unit I.
- This expansion will increase the capacity from the present 84,000 MTPA to 1,32,000 MTPA.
- Company will also be expanding the Furnace Unit capacity which will enhance company’s production capacity to the extent of 1,04,232 MTPA from the existing capacity of 95,832 MTPA.
Expanding the product range to add more value-added products.
- MS Pipes and Scaffoldings are the end products that are manufactured from the conversion of Sponge Iron to HR MS Billets and HR Strips.
- Company provide a range of product specifications in MS Pipes and Scaffoldings in terms of thickness, length, quality, availability, and customised products.
- Company intends to further enhance the value proposition by manufacturing value added products which have better margins and wider markets.
Financials of the Company:
| (in Crores) | FY 19 | FY 20 | FY 21 | 30th Sept 21 |
|---|---|---|---|---|
| Revenue | 133.91 | 161.11 | 254.8 | 201.16 |
| Net Profit | 8.02 | 7.90 | 15.13 | 12.86 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 30th March 2022 |
| Issue Closes on:. | 5th April 2022 |
| Issue Price | Rs.144 – 153 |
| Face Value | Rs.10 |
| Minimum Lot | 98 Shares |
| Minimum Investment | Rs.14,994 |
| Issue Constitutes | 33.36% |
| Issue Size | Rs.130 cr |
| Market Cap | Rs.389.78 cr |
| Listing at | NSE & BSE |
| Equity Shares Offered (Fresh) | 85,00,000 (Rs.130 cr) |
| Equity Shares Prior to the issue | 1,69,76,204 |
| Equity Shares after the issue | 2,54,76,204 |
Also Read : List of Upcoming IPO’s in India.
Also Read : List of Upcoming SME IPO’s in India.
Important Dates:
| Finalization of Basis of Allotment | on or Before 8th April 2022 |
| Initiation of Refunds | on or Before 11th April 2022 |
| Credit of Equity Shares: | on or Before 12th April 2022 |
| Listing Date: | on or Before 13th April 2022 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 9.80 | 14.38 | 21.38% | 49.79 |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| Hariom Pipe Industries Ltd | 10 | 9.80 | 14.38 | 21.38% | 49.79 |
| APL Apollo Tubes Ltd | 2 | 12.30 | 78.33 | 10.61% | 116.00 |
| Hi-Tech Pipes Ltd | 10 | 12.50 | 41.36 | 8.66% | 154.99 |
| Rama Steel Tubes Ltd | 5 | 3.24 | 103.16 | 6.08% | 52.68 |
| JTL Infra Ltd | 2 | 18.91 | 11.43 | 20.70% | 91.36 |
| Check IPO Allotment Status: |
|---|
Bigshare: http://www.bigshareonline.com/IPO/AllotmentBSE IPO Website: https://www.bseindia.com/IPO/Allotment |
| Company Contact Info: |
|---|
| Hariom Pipe Industries Ltd Plot 3-4-174/12/2, 1st Floor, Samarpan Lane, Besides Spencer’s, Pillar No. 125, Attapur, Hyderabad – 500 048, Telangana, India. Tel: +91 40 2401 6101 E-mail: cs@hariompipes.com Website: www.hariompipes.com |
| IPO Registrar Info: |
|---|
| BIGSHARE SERVICES PRIVATE LIMITED 1st Floor, Bharat Tin Works Building, Opp. Vasant Oasis Makwana Road, Marol, Andheri East, Mumbai – 400 059 Tel. No.: +91 22 6263 8200 Email: ipo@bigshareonline.com Investor Grievance Email:investor@bigshareonline.com Website: www.bigshareonline.com |
| Lead Manager to the Issue: |
|---|
| ITI Capital Limited ITI House, 36 Dr. R. K. Shirodkar Marg Parel, Mumbai – 400 012 Maharashtra, India Tel No.: +91 22 4031 3371 Email: ipo.hariom@iticapital.in Investor email: investorgrievance@iticapital.in Website: www.iticapital.in |
