2024-07-04 11:10:02
Bansal Wire IPO subscription status: On the first day of bidding yesterday, Wednesday, July 3, the initial public offer (IPO) of steel wire maker Bansal Wire Industries Ltd got off to a terrific start with a big number of subscriptions from retail and non-institutional investors. At the end of day 1, Bansal Wire Industries IPO subscription status was 1.76 times, as per BSE data.
The retail investor quota has been subscribed to 2.47 times, while the non-institutional investor (NII) component has been subscribed to 2.44 times. One percent of the category is reserved for Qualified Institutional Buyers (QIBs).
The public offering of Bansal Wire Industries has set aside a 15% of its shares for NII, 50% of its shares for QIB, and 35% of its shares for retail investors.
On Tuesday, Bansal Wire Industries said that it had received more than ₹223 crore from major investors. Steel wire manufacture and exporting are the activities of Bansal Wire Industries. High carbon steel wire, mild steel wire (low carbon steel wire), and stainless steel wire are its three main operating sectors.
Additionally, the firm intends to strengthen and expand its market position in the future fiscal year by adding a new sector of specialty wires through its planned Dadri factory.
With a market capitalisation of ₹40,078.3 million following the issuing of equity shares and 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 its FY24 earnings.
With more than 3,000 SKUs of high carbon steel, mild steel (low carbon), and stainless steel wires, the firm and its subsidiary, Bansal Steel & Power Limited, provide one of India’s largest product portfolios for steel wire. The subsidiary offers around 1,500 SKUs, compared to about 2,000 SKUs offered by the company. We advise the IPO to receive a “Subscribe – Long Term” grade based on these considerations.
The brokerage claims that in FY 22, FY 23, and FY 24, the business has maintained a year-over-year client retention rate of 64.74%, 66.06%, and 68.49%, respectively. It sells around 86% of its output domestically and exports the remaining portion. The US and European wire markets account for over 70% of export earnings. The business has a sizable market share in India.
Over the course of FY22–24, the revenue CAGR was around 5.9%. For the year that ended in FY24, the company’s EBITDA margin was 6.04%, while its PAT margin was 3.19%. producing a 21.19% and an 18.46% return on equity, respectively, for FY24.
Using diluted EPS for FY 24 ( ₹6.18), the business is requesting a PE multiple of 41.4x on the higher end of the pricing band.32.72x is the industry average. For FY24, the P/BV is 7.72x. With a medium- to long-term perspective, investors may choose to subscribe for the issue given all the variables, risks, possibilities, and high value.
Bansal Wire IPO, which is worth ₹745 crore, comprises a fresh issue of 29,101,562 equity shares. There’s no offer-for-sale (OFS) component.
The firm’s memorandum of association outlines its core objectives, as well as incidental and ancillary goals that support them. These goals allow the company to: (i) carry out its current commercial operations; and (ii) carry out the projects that are suggested to be funded with the net proceeds.
The book running lead managers of the Bansal Wire IPO are SBI Capital Markets Limited and Dam Capital Advisors Ltd (formerly Idfc Securities Ltd), with Kfin Technologies Limited serving as the issue’s registrar.
Bansal Wire IPO GMP today is +60. This indicates Bansal Wire Industries share price were trading at a premium of ₹60 in the grey market, according to investorgain.com.
Bansal Wire Industries expected listing price was ₹316 per share, 23.44% more than the IPO price of ₹256, taking into account the top end of the IPO pricing band and the existing premium on the grey market.
Investor willingness to pay over the issue price is indicated by the “grey market premium.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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