Happy Steels SME IPO debuts at ₹68, missing grey market premium

Happy Steels made its market debut on the NSE SME platform on Thursday, opening at ₹68 per share. This represented a 3% premium over the final issue price of ₹66. The stock subsequently climbed as much as 5.3% to ₹69.50, after touching an intraday high of ₹71.40.

The early trading performance fell short of pre-listing expectations. The stock's grey market premium had stood at ₹10 ahead of the debut, signalling an estimated listing price of ₹76. The lower-than-anticipated open illustrates a disconnect between heavy primary market demand and secondary market valuations.

The company's ₹25 crore initial public offering was open for subscription from July 9 to July 13. It comprised a fresh issue of 37.88 lakh equity shares priced between ₹62 and ₹66. Despite the muted debut, the offering attracted robust demand, closing nearly 78 times oversubscribed.

Happy Steels intends to use the capital to strengthen its balance sheet and expand capacity. The firm has allocated ₹13.16 crore toward capital expenditure for additional plant and machinery at its existing facility. Another ₹4.98 crore will be used to prepay outstanding bank term loans to lower its debt burden.

Founded in 1996, the company manufactures safety-critical forged and precision-machined transmission and driveline components. It operates a fully integrated manufacturing process, handling everything from raw material procurement to final packaging. Its components serve on-highway and off-highway vehicles, electric vehicles, and the defence industry.

For investors, the listing highlights the pricing risks inherent in heavily oversubscribed SME offerings. However, Happy Steels holds exposure to growth areas like electric vehicles and defence. By directing a majority of its proceeds toward tangible capacity expansion and debt reduction, the firm is addressing standard small-cap constraints to scale its operations.