Bansal Wires IPO Closes With Dull Retail Response; Listing On 10 July
The retail subscription remains muted with only 14.37 times, while the overall issue is subscribed 62.76 times
The initial public offering (IPO) of Bansal Wire Industries opened on 03 July to raise Rs 745 crore from the public market.
The IPO consisted exclusively of fresh issues of up to Rs 745 with a price band of Rs 243 to 256.
During the subscription phase, the issue received robust response from qualified institutions with the subscription more than 150 times. However, the retail subscription remained muted with only 14.37 times, while the overall issue was subscribed 62.76 times.
The allotment will be declared on 08 July and subsequently the shares will be listed on 10 July on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
SBI Capital Markets and Dam Capital Advisors are the book running lead managers, while Kfin Technologies is the registrar to the offer.
Analysts Advice
The company is operating in a highly competitive and fragmented segment of metal wires. The issue appears reasonably priced, based on the FY24 annualized earnings. We expect a listing at around Rs 320 to 330 per share, resulting in a listing gain of around 25 per cent,” said Anit Goel, Co-founder and Chief Global Strategist, Pace 360.
IPO Objectives
The proceeds of Rs 800 crore from the fresh issue will be utilised for prepayment or scheduled repayment of a portion of certain outstanding borrowings availed by the company and its subsidiary. Funds will also be used towards general corporate purposes.
Additionally, the firm will also get benefits on listing in the public market which will enhance the brand’s visibility and provide liquidity to the shareholders.
Firm’s Financials
The firm registered revenue of Rs 2,470 crore in FY24, compared to Rs 2,422 crore in FY23.
The firm’s profit after tax (PAT) increased to Rs 78.80 crore in FY23 compared to Rs 59.93 crore in FY22.
Overall, revenue increased merely by around 2 per cent, whereas PAT rose by 31.48 per cent.
About Bansal Wires
Bansal Wire Industries along with its subsidiary, Bansal Steel and Power (BSPL), offers products primarily in three segments, which are high carbon steel wire, mild steel wire and stainless steel wires. The company boasts strong customer diversification to de-risk impact on revenue along with a diversified product portfolio serving different sectors with their different needs effectively.
The demand for wires is mainly driven by its major end-user industries such as automotive, construction, power, and agriculture, with infrastructure holding the highest demand for wires. The increase in consumption of steel across infrastructure, automobile and housing sectors can be seen with the positive economic trends domestically. Owing to such growth, steel manufacturers are expected to be the direct beneficiary of this growth.
