scorecardresearch85% returns in six months! This newly listed small-cap stock is trading 131% higher than its IPO price

85% returns in six months! This newly listed small-cap stock is trading 131% higher than its IPO price

Updated: 30 Dec 2022, 12:22 PM IST
TL;DR.
Hariom Pipe Industries is a small-cap stock with a market capitalization of 911.5 crore. The stock made a successful market debut in April this year at 214 apiece, compared to the issue price of 153.
For the September quarter, the company reported a consolidated net profit of Rs. 9.3 crore. It posted a net profit of  <span class='webrupee'>₹</span>7.2 crore in the same quarter of the last fiscal.

For the September quarter, the company reported a consolidated net profit of Rs. 9.3 crore. It posted a net profit of 7.2 crore in the same quarter of the last fiscal.

Maintaining their winning streak, Shares of Hariom Pipe Industries opened strongly in Friday's trade at 363.20 apiece and rose further to hit an intra-day high of 367. 

However, the stock soon pared gains to trade at Rs. 353.95, down 1.03 percent, at 12:00 p.m. versus a 0.14 percent rise in the benchmark S&P BSE Sensex.

In the last four trading sessions, the stock soared 19.26 percent. On December 28, the stock reached a lifetime high of Rs. 403.55 per share. 

This strong spike came after the company said it entered into an asset transfer agreement with RP Metal Sections on December 26, 2022, to purchase a unit that manufactures galvanised pipe and cold rolled coils.

In a filing to BSE, the company said the unit is spread across 13.83 acres of land and located at the SIPCOT Industrial Growth Centre, Perundurai, Tamil Nadu. The purchase is for an all-cash consideration of 55 crore and is subject to obtaining certain permissions and approvals for the transfer of licences.

Hariom Pipe Industries said it is in the process of expanding its product range to add more value-added products, and this purchase will help the company in achieving the same, it said.

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Stock price chart of Hariom Pipe Industries.

Hariom Pipe Industries is a small-cap stock with a market capitalization of 911.5 crore. The company is an integrated manufacturer of MS pipes, scaffolding, HR strips, MS billets, and sponge iron. A substantial portion of the company’s sponge iron, MS billets and HR strips is used for captive consumption in the manufacturing of MS pipes and scaffolding.

The stock made a successful market debut in April this year at 214 apiece, compared to the issue price of 153. The stock rose further, closing the first day at 224.7, more than 46.9 percent higher than the IPO price.

The IPO of the Hyderabad-based company received a healthy response from investors as it was subscribed 7.93 times. 

In the last six months, the stock delivered a return of 85 percent, moving from 191.45 apiece to the current price. 

At current levels, the stock is trading 131 percent above its issue price. August has seen the largest monthly rise of 22.69 percent while November has seen the second-largest gain of 13.55 percent.

For the September quarter, the company reported a consolidated net profit of Rs. 9.3 crore. It posted a net profit of 7.2 crore in the same quarter of the last fiscal.

Total revenue increased by nearly 11.48 percent to 127.2 crore in the September quarter of FY23, compared to 114.1 crore in the same period last year.

Further, the company’s EBITDA grew 12.58 percent to 16.1 crore in Q2 FY23 as against 14.3 crore in the similar quarter of last year. Similarly, the EBITDA margin of the company increased marginally by 7 bps YoY, to 12.63 percent from 12.56 percent.

Meanwhile, the stock saw its FII holdings rising from 2.2 percent in June 2022 to 2.7 percent in the September quarter. The promoters own 66 percent of the shares in the company. Mutual funds own just 0.4 percent of the company, while regular shareholders hold 30.9 percent.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.

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First Published: 30 Dec 2022, 12:22 PM IST