Bansal Wire IPO subscribed 33 times on Day 3 so far; GMP rises as QIB portion booked 63x

The initial public offering (IPO) of Bansal Wire Industries saw a solid response from the investors during the third and final day of the bidding process. The issue, which was booked more than 6 times at the end of the second day of the bidding, saw a strong interest from the institutional bidders.
 

The New Delhi-based Bansal Wire Industries is selling its shares in the price band of Rs 243-256 apiece. Investors can apply for a minimum of 58 shares and its multiples thereafter. It is looking to raise Rs 745 crore via IPO, which is entirely a fresh share sale of 2,91,091 562 equity shares.
 

According to the data, the investors made bids for 72,05,87,476 equity shares, or 33.80 times, compared to the 2,14,60,906 equity shares offered for the subscription by 3.00 pm on Friday, July 05. The three-day bidding for the issue, which opened on Wednesday, July 03, concludes today.
 

The allocation for qualified institutional bidders (QIBs) was subscribed over 63 times, while the portion reserved for non-institutional investors saw a subscription of 45.18 times. However, the quota set aside for retail investors was booked 11.84 times of the time.
 

Bansal Wire Industries, which incorporated in December 1985, is a stainless steel wire manufacturing company. The company operates in three main segments including high carbon steel wire, low carbon steel wire (mild steel wire), and stainless steel wire. The company makes over 3,000 different types of steel wire products.
 

The grey market premium of Bansal Wire Industries has surged sharply after the solid buying interest from the investors. Last heard, the company was commanding a premium of Rs 70-75 in the unofficial market, suggesting a listing pop of about 30 per cent for the investors. However, the premium in the grey market stood around Rs 60 levels, a day ago.
 

Brokerage firms are mostly positive on the issue suggesting investors to subscribe to it on the back of robust business model, strong growth prospects, rising demand of products and long term experience of the management. However, limited reach in the southern Indian and raw material price fluctuations are the key risks for the company.
 

With around four decades of operations, Bansal Wire has established itself as a branded player in the domestic steel wire market. Its diversified product portfolio and customer base, makes its business largely insulated from the volatilities in its product demand. Moreover, on the back of cost-plus business model, the company is able to maintain its profitability margin, said Choice Broking.
 

"Bansal Wire is likely to benefit from the commissioning of the Dadri facility and sustained demand of its products. Medium-term positive triggers would be better than expected demand for new products and rapid ramp-up of the new Dadri facility. Despite factoring the consolidation benefits from the group companies, lower financial liabilities and commissioning of new facilities, the demanded valuation seems to be stretched," it added with a 'subscribe for caution' rating.
 

Bansal Wire Industries raised Rs 223.5 crore through anchor investors  as it allocated 87,30,468 equity shares at a price of Rs 256 apiece. The company has reserved  50 per cent of the issue for the qualified institutional bidders (QIBs), while non-institutional investors have 15 per cent of the net offer. Remaining 35 per cent of the net offer shall be allocated towards retail investors.
 

Bansal Wire offers over 3,000 different stock-keeping units (SKUs), the highest among all steel wire manufacturers in the country. It serves more than 5,000 customers across various industries and exports its products to over 50 countries. Company has an Installed capacity of 262,000 MTPA for steel wire. They Operates 5 manufacturing facilities, said Ventura Securities.
 

"The stainless steel wire product line features cold heading wire, spring wires, welding wire, kitchenware & utensils, rope wires, fine wires, and scrubber wire. The steel wire demand is projected to grow at 8-10 per cent from FY23 to FY28, driven by the upcycle in the auto industry and increased infrastructure spending," it added with a 'subscribe' rating.
 

DAM Capital Advisors (Formerly IDFC Securities) and SBI Capital Markets are the book running lead managers of the Bansal Wire IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE with Wednesday, July 10 as the tentative date of listing.

 

 

 

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