Bansal Wire IPO - Investment Rationale, Issue Details, Key Strategies, Risks And More: DRChoksey

DRChoksey Research 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.

Outlook and Valuation:

Bansal Wires is expected to grow driven by higher growth of the end usage in infrastructure, automobile and construction industry. The expected volume growth of the steel industry demand projected to grow at a CAGR of 6.5%-7.5% from FY23-FY28P. In a fragmented market where the top 10 players hold just 22% of the market share, Bansal Wires and Tata Wire together command a substantial 13%.

Notably, the third largest player operates at approximately half the capacity of Bansal Group, highlighting significant opportunities for market share expansion.

The company has achieved impressive revenue growth, with a CAGR of 20.3% from FY18 to FY23. This upward trajectory is expected to accelerate further with planned expansion, aiming to increase the capacity substantially in the near term.

Bansal Wires is pursuing a prudent strategy to manage risks and drive growth, exemplified by its efforts to strengthen the balance sheet through debt reduction.

This strategic move not only enhances resilience but also lowers interest costs, paving the way for higher profitability with sustained growth. We assign a 'Subscirbe' to this IPO due to the improving strength of the balance sheet, available headroom for higher revenue growth driven by sufficient demand conditions and the additional capacity being added at the new Dadri Plant.

Click on the attachment to read the full IPO report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.