Bansal Wire Industries, a key player in the steel wire manufacturing sector, has made significant strides as it prepares for its Initial Public Offering (IPO). The company successfully raised ₹223 crore through anchor investors on July 2, 2024, ahead of its public issue set to open on July 3, 2024. This pre-IPO funding round saw the allocation of 87.3 lakh shares to 18 anchor investors at ₹256 each, the upper limit of the price band.
Comprehensive IPO Details
Price Band and Shares Allocation: The price band for the Bansal Wire Industries IPO is set between ₹243 and ₹256 per share. The IPO consists of a fresh issue of 29,101,562 equity shares, with no offer-for-sale component. The allocation strategy is as follows:
- Up to 50% of the shares are reserved for Qualified Institutional Buyers (QIBs).
- At least 15% of the shares are allocated to Non-Institutional Investors (NIIs).
- A minimum of 35% of the shares are reserved for retail investors .
Company Background
Bansal Wire Industries Ltd, headquartered in Delhi, specializes in manufacturing a broad range of steel wire products, including high carbon steel wire, mild steel wire, and stainless steel wire. The company operates from four manufacturing facilities located in the National Capital Region and exports its products to over 50 countries. Its product portfolio includes over 3,000 stock-keeping units (SKUs), catering to diverse industrial needs .
Financial Performance
Bansal Wire Industries has shown steady growth over the past few years. Here is a summary of their recent financial performance:
- FY22: Total revenue of ₹2205.07 crore with a profit after tax (PAT) of ₹57.29 crore.
- FY23: Total revenue increased to ₹2422.57 crore with a PAT of ₹59.93 crore.
- FY24: Total revenue further rose to ₹2470.88 crore with a PAT of ₹78.80 crore .
Financial Ratios:
- Return on Equity (ROE): 21.19%
- Return on Capital Employed (ROCE): 18.46%
- Debt to Equity Ratio: 1.48
- Price to Earnings (P/E) Ratio: 50.90 based on FY24 earnings (Chittorgarh.com) (Current IPO & Upcoming IPO).
Anchor Investors and Financial Strategy
The ₹223 crore raised from anchor investors includes prominent names like SBI Mutual Fund and HDFC Mutual Fund, showcasing strong institutional interest. The funds will be used to reduce debt, fund ongoing projects, and meet future working capital needs. The anchor round’s success sets a solid foundation for the upcoming IPO, indicating robust investor confidence (Chittorgarh.com) (IPO Watch).
IPO Timeline and Listing Information
Key dates for the Bansal Wire Industries IPO are as follows:
- IPO Open Date: July 3, 2024
- IPO Close Date: July 5, 2024
- Basis of Allotment Finalization: July 8, 2024
- Initiation of Refunds: July 9, 2024
- Credit of Shares to Demat Accounts: July 9, 2024
- Listing Date: July 10, 2024 on BSE and NSE .
Strategic Business Objectives
Bansal Wire Industries has outlined several strategic objectives in its memorandum of association, focusing on leveraging the IPO proceeds to enhance operational capacity and financial health. These funds will be instrumental in expanding existing projects, improving infrastructure, and boosting overall productivity. The company’s robust market presence and diverse product range position it well for sustained growth and profitability
Analyst Views and Market Sentiment
Analyst Insights:
- Mint Analysts: View the IPO as positively priced, reflecting Bansal Wire’s strong financial growth and market position. They highlight the company’s solid performance and the anticipated benefits of debt reduction and increased working capital (Chittorgarh.com).
- Chittorgarh Review: Analysts appreciate Bansal Wire’s extensive product portfolio and diversified customer base. They note the aggressive pricing but see long-term value for well-informed investors (Chittorgarh.com).
- IPO Watch: Positive sentiment surrounds the IPO, with expectations of a strong market debut. Analysts point to the company’s robust financial health and strategic use of IPO proceeds as key strengths (Lakshmishree).
Investment Considerations
Bansal Wire Industries’ IPO has generated significant interest in the market, with its grey market premium (GMP) indicating strong demand among investors. The company’s diverse product portfolio, strong financial performance, and strategic expansion plans, including the addition of specialty wires, make it a compelling investment opportunity. However, potential investors should perform due diligence and consult with financial experts to ensure alignment with their investment goals and risk tolerance
Conclusion
The Bansal Wire Industries IPO represents a significant opportunity for investors to participate in a well-established and growing company within the steel wire manufacturing sector. With a strong anchor book, clear strategic objectives, and robust market interest, the IPO is poised to make a strong debut on the stock exchanges. For continuous updates and detailed information, prospective investors can visit and IPO Watch (Chittorgarh.com) .
By staying informed and consulting with financial experts, investors can make well-founded decisions regarding their participation in the Bansal Wire Industries IPO, ensuring that their investments are aligned with their financial goals and market expectations.
Disclaimer: The opinions and suggestions presented above are solely those of the contributing analysts or brokerage firms, rather than those of Dawkco News. We recommend that investors consult with qualified professionals before taking any investment actions.
