Happy forgings Limited has received a regulatory disclosure from India Business Excellence Fund III regarding the complete disposal of its equity stake in the company. The fund disposed of 39,10,097 equity shares through a series of open market transactions spanning over eight months.

Transaction Details

The disposal was executed in multiple tranches between June 17, 2025 and February 12, 2026. The disclosure obligation under Regulation 29(2) of the SEBI Takeover Regulations was triggered when the fund disposed of 26,86,704 equity shares on February 12, 2026, which breached the 2% threshold requirement.

Shareholding Changes

The fund's complete exit resulted in a significant change in its shareholding position in Happy Forgings Limited. Prior to these transactions, India Business Excellence Fund III held a notable stake in the company.

Company Share Capital Structure

Happy Forgings Limited maintains a stable equity share capital structure throughout this disposal period. The company's total equity share capital remained unchanged at 9,43,27,920 equity shares with a face value of INR 2 per share, amounting to INR 18,86,55,840.

Fund Background

India Business Excellence Fund III operates as a scheme of Business Excellence Trust III, with MO Alternate Investment Advisors Private Limited serving as its investment manager. The fund confirmed that it does not belong to the promoter or promoter group of Happy Forgings Limited. The disclosure was signed by Bharat Kedia, Chief Operating Officer, on behalf of the fund from Mumbai on February 12, 2026.

Regulatory Compliance

The disclosure was filed with both BSE Limited (Scrip Code: 544057) and National Stock Exchange of India Limited (Symbol: HAPPYFORGE) in compliance with SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The fund maintained transparency throughout the disposal process by providing detailed transaction information to all relevant stakeholders.

Happy Forgings Limited has filed its quarterly monitoring agency report for Q3FY26 with stock exchanges, prepared by ICRA Limited as the appointed monitoring agency. The report, dated February 04, 2026, confirms that the utilization of IPO proceeds remains aligned with the stated objects of the issue without any material deviations.

IPO Proceeds Utilization Status

The company's IPO, which concluded in December 2023, raised net proceeds of ₹377.823 crore after excluding issue-related expenses. The monitoring report shows systematic progress in fund deployment across the three main objects of the issue.

Equipment Purchase Progress and Timeline

The purchase of equipment, plant and machinery represents the largest component of the IPO proceeds allocation. The company has completed this object partially, with ₹94.657 crore already deployed. The remaining ₹76.469 crore is expected to be utilized during FY2026, representing a delay of 3-12 months from the original timeline of FY24-FY25.

The company had initially planned expenditure across FY2024 and FY2025, utilizing ₹41.953 crore in FY2025 and ₹52.704 crore in Q2FY2026. The monitoring agency noted no adverse comments regarding this timeline adjustment.

Deployment of Unutilized Funds

The company has deployed its unutilized proceeds of ₹76.502 crore in fixed deposits with AU Bank, earning returns of 8.20% per annum. These deposits mature on January 16, 2026, and have generated earnings of ₹1.568 crore during the quarter, bringing the total market value to ₹78.070 crore.

Completed Objects

Two of the three IPO objects have been fully completed:

Prepayment of Borrowings: The company successfully completed the prepayment of ₹152.760 crore toward outstanding borrowings as planned in FY24.

General Corporate Purpose: The allocated ₹53.937 crore was fully utilized in Q3FY24 and Q4FY24 for various operational expenses including:

• Electricity bills to PSPCL: ₹7.754 crore
• Raw material purchases: ₹20.803 crore
• Payment of taxes, services, and expenses: ₹25.380 crore

Regulatory Compliance and Monitoring

ICRA Limited, appointed as the monitoring agency through an agreement dated December 08, 2023, confirmed that all utilization aligns with the offer document disclosures. The report states no requirement for shareholder approval as no material deviations were observed from the expenditures disclosed in the offer document.

The monitoring agency emphasized that the report provides an objective view based on information from the issuer and does not constitute commentary on the quality of issue objects or assurance on spending outcomes. The company's audit committee and board of directors have provided no additional comments on the monitoring report.