Bansal Wire IPO subscription status: On the first day of bidding yesterday, Wednesday, July 3, the initial public offering (IPO) of steel wire maker Bansal Wire Industries Ltd got off to a strong start with a large number of subscriptions from retail and non-institutional investors. According to BSE data, the subscription status of Bansal Wire Industries’ IPO was 1.76 times after day 1.
The retail investor quota has been subscribed to 2.47 times, while the non-institutional investor component has been subscribed to 2.44 times. Qualified Institutional Buyers (QIBs) have one percent of the category reserved.
Bansal Wire Industries’ public offering reserved 15% of its shares for NIIs, 50% for QIBs, and 35% for regular investors.
Bansal Wire Industries announced on Tuesday that it has garnered over ₹223 crore from significant investors. Bansal Wire Industries manufactures and exports steel wires. High carbon steel wire, mild steel wire (low carbon steel wire), and stainless steel wire are its three main business sectors.
Furthermore, the company plans to improve and grow its market position in the coming fiscal year by introducing a new sector of specialized wires through its planned Dadri factory.
Bansal Wire’s initial public offering review
Anand Rathi Research:
The company has a market capitalization of ₹40,078.3 million after issuing equity shares, with a market cap-to-sales ratio of 1.62 times its FY24 profits. The brokerage claims that the company’s P/E ratio is 50.8 times based on FY24 earnings.
The company, along with its affiliate Bansal Steel & Power Limited, possesses one of the largest product portfolios of steel wires in India, comprising over 3,000 SKUs of stainless steel, mild steel (low carbon), and high carbon steel. The subsidiary has approximately 1,500 SKUs, as opposed to the company’s 2,000 SKUs. Based on these factors, we recommend that the IPO be assigned a “Subscribe – Long Term” grade.
Sushil Finance
The brokerage says that in fiscal years 22, 23, and 24, the business maintained a year-over-year client retention rate of 64.74%, 66.06%, and 68.49%, respectively. It sells approximately 86% of its products domestically and exports the remainder. The US and European wire markets contribute to more than 70% of export revenue. The company holds a substantial market share in India.
During FY22-24, the revenue CAGR was approximately 5.9%. In FY24, the company’s EBITDA margin was 6.04%, and its PAT margin was 3.19%. For fiscal year 24, the returns on equity were 21.19% and 18.46%, respectively.
Using diluted EPS for FY 24 (₹6.18), the company is demanding a PE multiple of 41.4x on the highest end of the pricing range. The industry average is 32.72x. For FY24, the P/BV ratio is 7.72x. Investors may opt to subscribe to the issue in the medium to long term due to all of the variables, risks, opportunities, and high value.
Bansal Wire Industries IPO information
Bansal Wire’s ₹745 crore IPO includes a new offering of 29,101,562 equity shares. There is no offer-for-sale component.
The firm’s memorandum of association states its primary aims, as well as incidental and supplementary purposes that support them. These objectives enable the company to (i) continue its current commercial operations; and (ii) carry out the initiatives proposed to be funded using the net proceeds.
The Bansal Wire IPO’s book-running lead managers are SBI Capital Markets Limited and Dam Capital Advisors Ltd (formerly Idfc Securities Ltd), with Kfin Technologies Limited acting as the issue’s registrar.
Bansal Wire Industries’ IPO GMP today
Bansal Wire’s IPO GMP today is +60. Investorgain.com reports that Bansal Wire Industries’ share price was trading at a premium of ₹60 in the gray market.
Bansal Wire Industries’ estimated listing price of ₹316 per share is 23.44% higher than the IPO price of ₹256, considering the top end of the pricing band and the existing premium on the grey market.
The “grey market premium” indicates the willingness of investors to pay more than the issue price.
