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The public offer 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 IPO review
Bansal Wire, a manufacturer of steel wire products, operates across three segments, catering to a diverse customer base exceeding 5,000. With a comprehensive product portfolio of over 3,000 SKUs, the company offers a favorable mix of high-volume and higher-margin products, contributing to a stable and consistent margin profile.
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Analysts believe the company's financial performance has been positive, demonstrating consistent growth in both revenue and profitability. However, the company's operations are susceptible to fluctuations in raw material supply and costs due to the inherent volatility of the steel market.
"The IPO is priced at a P/E ratio of 41.41x, which appears on the higher end. Considering both the company's strengths and potential risks, we recommend this IPO only for investors with high-risk," said Swastika Investmart.
Bansal Wire IPO price band
The issue is priced in the range of Rs 243-256 per share. 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.
Other details
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.
The 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 more than 25% of the sales.
The total income has increased at a CAGR of 28% from Rs 1480 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.
SBI Capital Markets and DAM Capital are acting as the book running lead managers to the IPO.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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