Hariom Pipe Hits New High, Shareholders Approval to Preferential Issue, Shares Up 4%

Hariom Pipe's IPO gave 214% return, share now at record high.

Shares of Hariom Pipe Industries (HPIL) hit an all-time high of Rs 481.15, up 4% on BSE in intraday trade on Tuesday after getting shareholders’ approval to raise funds through a preferential share issue.

Shares of the steel products maker surpassed the previous high of Rs 468 hit on March 14, 2023. The stock has risen nearly 50% over the past three months, with a 5% decline in the S&P BSE Sensex. Moreover, it has soared 80% over the past six months, while the benchmark index has fallen 3%.

The company’s market price is up 214% from the issue price of Rs 153 per share. HPIL will debut on the stock market on April 13, 2022.

Shareholders approved the issuance of up to 3.37 million warrants, each convertible or exchangeable for one share in the company within 18 (eighteen months), and issuing up to 2.14 million equity shares at Rs 10 each, HPIL said. The company offers incentives to designated persons under the promoter/sponsor group of the company and certain identified non-sponsor persons on a preferential basis.

The HPIL board meeting on January 25, 2023, has approved the issue of warrants (Rs 116.30 crore) and equity shares (Rs 73.97 crore) at Rs 345 crore to raise a total of Rs 190.27 crore per share.

HPIL is one of the most backward integrated steel pipe mills where HPIL produces sponge iron, steel billet, hot rolled strip and steel pipe.

In December 2022, the company entered into an asset transfer agreement with R.P. Metal Sections Private Limited to acquire an operating galvanized pipe plant in Perundurai, Tamil Nadu, which will increase capacity, expand the product range and expand the geographic scope of the company. The initial positive impact of the acquisition will be felt from the fourth quarter of the current financial year, while the full impact will be felt from the 2023-24 financial year (FY24).

The company has also built a modern cold rolling mill and a galvanized pipe fabrication plant near Hyderabad. The full benefits of these expansions and capex will be seen beyond FY24.

HPIL said it would strive to grow horizontally and vertically in terms of geography, product basket expansion, value-added products and fast turnaround times in the supply chain and to meet the needs of its customers.

It added that as one of the most backward integrated steel pipe mill companies, HPIL produces sponge iron, billets, hot-rolled strips and steel pipes. The company is confident it will excel in the industry and maintain healthy profit margins.

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