Bansal Wire IPO - Investment Rationale, Issue Details, Financials, Strengths, Risks And More: Anand Rathi

Anand Rathi's IPO Report

Bansal Wire Industries Ltd. launched its initial public offering today and the offer closes for subscription on July 05. The Rs 745 crore public offering consists of a fresh issue with no offer-for-sale component. The company has set a price band of Rs 243–256 per share with a face value of Rs 5 each.

The minimum lot size for retail investors is 58 shares.

Object of fresh issue:

• Payment or repayment of all or portions of their certain borrowings.

• Investment in their subsidiary for repayment or prepayment of borrowings.

• Funding the working capital requirements of the company.

• General Corporate purposes.

Valuation

Bansal Wire's steel wire manufacturers generating a revenue of Rs 24,660.3 million in Fiscal 2024, possessing an established market position and strong brand equity.

The company serves a customer base of over 5,000 clients across various industrial sectors. The company's P/E ratio is 50.8 times based on its FY24 earnings, with a market capitalization of Rs 40,078.3 million after the issuance of equity shares and a market cap-to-sales ratio of 1.62 times its FY24 earnings.

The company and its subsidiary, Bansal Steel and Power Ltd., offer one of India’s most extensive steel wire product portfolios, with over 3,000 SKUs across high carbon steel, mild steel (low carbon), and stainless-steel wires.

The company offers around 2,000 SKUs, while the subsidiary provides approximately 1,500 SKUs. Looking at these factors we recommend “Subscribe – Long Term” rating to the IPO.

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