The ₹745 crore initial public offering (IPO) of Bansal Wire Industries saw a fantastic response, getting fully subscribed within the first four hours on its opening day, Wednesday, July 3. The IPO, which includes 2.91 crore new shares, will remain open until Friday, July 5, 2024.
Bansal Wire Industries, along with its subsidiary Bansal Steel & Power Limited, offers over 3000 types of wire products. They manufacture high-carbon steel wire, mild steel wire, and stainless steel wire. The company operates four manufacturing facilities in the National Capital Region (NCR)—three in Ghaziabad (UP) and one in Bahadurgarh (Haryana). Their distribution network spans 22 states and six union territories
From FY22 to FY24, Bansal Wire Industries' total income grew by 5.86% annually, rising from ₹2,205.07 crore to ₹2,470.89 crore. Their earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 14.87% annually, from ₹113.15 crore to ₹149.31 crore, while profit after tax (PAT) grew by 17.28% annually, from ₹57.29 crore to ₹78.80 crore.
nBefore the IPO opened, Bansal Wire Industries raised over ₹223 crores in an anchor book round, selling 87,30,468 equity shares to anchor investors at ₹256 per share. The funds from the IPO will be used to pay off certain borrowings, support working capital needs, and for general corporate purposes.
By 1:50 pm on Day 1, the IPO was subscribed 1.03 times overall. The retail segment was subscribed 1.57 times, while the non-institutional investors (NII) segment was subscribed 1.12 times. The grey market premium (GMP) for the IPO was noted at +₹60, showing strong investor interest.The share allotment for the IPO is expected to be finalized on Monday, July 8, 2024, with shares likely to debut on the BSE and NSE on Wednesday, July 10, 2024. Experts have different views on the IPO. Parth Shah from StoxBox recommends subscribing for medium to long-term benefits, noting the company’s strong customer base and growth potential. Amit Goel from Pace 360 expects a listing gain of around 25%, while Master Capital Service suggests subscribing for listing gains, pointing out that the company will be nearly debt-free post-IPO. Anand Rathi recommends subscribing for long-term benefits, highlighting the company's reasonable valuation.
With its strong financial performance, strategic use of IPO proceeds, and positive market reception, Bansal Wire Industries' IPO looks like a promising opportunity for investors. However, it’s always wise to consult with certified experts before making any investment decisions. Bansal Wire Industries has shown consistent financial performance over the years, with steady revenue growth and profitability. This strong track record, combined with efficient management practices, has positioned the company well in the market. Investors are optimistic about its future prospects, particularly with the strategic use of IPO funds.
Given the strong initial subscription and favourable GMP, Bansal Wire IPO looks promising. The company’s solid financial fundamentals, diverse product portfolio, and strategic plans for the use of IPO proceeds suggest potential for future growth. However, as with any investment, it’s crucial to consider your own risk tolerance and investment goals. Consulting a financial advisor is always a wise step before making any investment decisions.
Bansal Wire’s IPO has generated significant interest and confidence among investors, as evidenced by the full subscription on the first day. With a high grey market premium and a clear strategy for using the raised funds, this IPO could be a valuable addition to your investment portfolio. If you’re looking for an opportunity in the steel wire sector with good growth potential, Bansal Wire’s IPO is worth considering.