Hariom Pipes makes strong debut; zooms 46% against issue price

The stock was locked in the upper circuit at Rs 224.70, up 46% against its issue price of Rs 153 per share on the BSE

Hariom Pipes made a strong market debut with equity shares of the company getting listed at Rs 214, a 40 per cent premium against its issue price of Rs 153 per share, on the BSE on Wednesday. At 11:51 AM, the stock was locked at maximum upper limit of the day at Rs 224.70, up 46 per cent against its issue price.

A combined 4.1 million equity shares had changed hands and there are pending buy orders for 430,000 shares on the NSE and BSE. In comparison, the S&P BSE Sensex was down 0.02 per cent at 58,563 points.

"Effective from Wednesday, April 13, 2022, the equity shares of Hariom Pipe Industries shall be listed and admitted to dealings on the exchange in the list of 'T' group of securities," BSE said in a notice dated April 12, 2022. In the T2T segment, each trade has to result in delivery and no intra-day netting of positions is allowed.

The Rs 130 crore share sale issue of Hariom Pipe had received a decent response with issue being subscribed 7.93 times on strong response from the retail investors. The portion reserved for retail bidders was subscribed 12.15 times, whereas the non-institutional buyers quota attracted 8.87 times biddings. The portion for institutional buyers fetched 1.9 times subscription. The company raised funds via the primary route entirely through the fresh equity sale.

The company proposed to utilize the net proceeds from the issue towards funding capital expenditure requirements, funding the working capital requirements of the company.

Hariom Pipe manufactures iron and steel products including Mild Steel (MS) Pipes, Scaffolding, HR Strips, MS Billets, and Sponge Iron. The company sells and markets MS Pipes in the western and southern parts of India under the brand name "Hariom Pipes".

As part of the B2B sales, the company sells MS Pipes and Scaffoldings to specific developers and contractors. Hariom Pipe Industries has more than 200 dealers and distributors for selling its products. The company is located in Hyderabad, Telangana.

"The company's good listing can be attributed to good prospects for the steel pipes industry. The company has an integrated nature of operations, a cost-effective process, and an experienced management team. However, the cyclical nature of the industry, and commoditized nature of products make it suitable only for the aggressive investors in the long term," said Santosh Meena, Head of Research, Swastika Investmart.