Bansal Wire IPO to open for subscription on Wednesday. Here’s what GMP indicates

The initial public offering of Bansal Wire will open for subscription on Wednesday and close on Friday. The issue, which comprises a fresh equity sale of 2.91 crore shares, is priced in the range of Rs 243-256 apiece.

At the upper end, the company plans to raise around Rs 745 crore. Investors can bid for 58 shares in one lot and in multiples thereafter.

Ahead of the IPO subscription, the company’s shares were trading at a premium of Rs 65 in the unlisted market.

The public offering is being made through the book building process, wherein about 50% of the issue is reserved for qualified institutional buyers, 35% for retail investors and 15% for non-institutional investors.

The company proposes to use the funds from the IPO to repay some of its debt, working capital requirements and other general corporate purposes.Bansal Wire is the largest stainless steel wire manufacturing company and the second largest steel wire manufacturing company by volume in India with a production of 72,176 MTPA and 206,466 MTPA, respectively, in FY23.Also Read: Petro Carbon and Chemicals stock lists with 75% premium over IPO priceThe company has a diversified portfolio, catering to a wide range of sectors such as automotive, general engineering, infrastructure, hardware, consumer durables, power and transmission, agriculture and auto replacement.

It manufactures over 3,000 stock keeping units — the highest amongst all steel wire manufacturers in India with sizes ranging from as thin as 0.04 mm to as thick as 15.65 mm.

With a well-diversified base of more than 5,000 customers spanning various sectors, Bansal Wires Industries has established a robust network that contributes to its growth.

Over the years, the company has adopted a de-risking strategy, under which no single customer accounts for more than 5% of its sales, and no sector or segment constitutes over 25% of the sales.

The total income has increased at a CAGR of 28% from Rs 1,480 crore in FY21 to Rs 2,422 crore in FY23. EBITDA during the same period grew at a rate of 16% to Rs 1,15 crore, while PAT has increased at 21.6% to Rs 59.9 crore.

In the six months ended September 2023, revenue stood at Rs 1,154 crore, while profit came in at Rs 38.9 crore.

SBI Capital Markets and DAM Capital are acting as the book running lead managers to the IPO.