Bansal Wire IPO Review

Bansal Wire Industries Limited specializes in manufacturing stainless steel wire across three segments: high carbon steel, low
carbon steel (mild steel), and stainless steel.

IPO opensJuly 03, 2024
IPO ClosesJuly 05 2024
IPO Size (Rs.)₹745.00 Cr
IPO Size (shares)29,101,562 shares
BreakupFresh issue only
Face Value:₹ 5
IPO Price in Rs :₹243 to ₹256 per share
Minimum Lot58 Shares
Listing AtNSE , BSE (mainboard)
QIB ~50 %
NII Quota~15%
Retail Quota~35%
 Lead ManagerSBI Capital Markets, DAM Capital Advisors
RegistrarKfin

Bansal Wire IPO: Notes

  • Bansal Wire Industries is India’s No. 2 steel wires manufacturer by volume.
  • It has a 6% market share. In stainless steel wires, its market share is about 20%.
  • Company has 4 manufacturing facilities at Ghaziabad and Jhajjar in Haryana, with a total installed capacity of 2.6 lakh MTPA.
  • Out of this aggregate capacity 1.3 lakh MTPA capacity is housed under 7subsidiary Bansal Steel & Power.
  • Company started production of high carbon wires at its  Dadri facility in end January 2024, with an initial capacity of 1,000 metric. This has been increased to 3,000 metric tonnes. It reported a 78.5% capacity utilisation till March 31, 2024.
  • Currently the company generates 66% revenue from the northern region.
  • Company exports its products to several countries, like Bangladesh, Brazil, France, Germany, Israel, Italy, Netherland, South Korea, South Africa, Sri Lanka, Turkey, United Kingdom, United States of America and Vietnam. In FY2024, total sales from outside India was 11.49% of Revenues.
  • Company acquired 76.15% of the shareholding of Bansal Steel & Power Limited (BSPL) which produces high-carbon wires for automotive, galvanized mild steel wire for cables, and stainless-steel wires mainly for exports. BSPL has become a Subsidiary of the Company from December , 2023.
  • Company has also entered into industrial lease agreements dated January 8, 2024, with Bansal High Carbons Private Limited and Balaji Wires Private Limited to use their premises and equipment installed at their manufacturing facilities.
Particulars / Rs. Cr2024(12)2023(12)2022(12)
Share Capital63.739.19.1
Net Worth as stated422.37282.51223.01
Total Debt681.14422.19413.15
Revenue from Operations2,466.032,413.012,198.36
Revenue Growth (%) as stated2.29.76
EBITDA as stated149.31114.71113.15
EBITDA Margin (%) as stated6.044.735.13
Net Profit for the period78.859.9357.29
Net Profit (%) as stated3.192.472.6
EPS – Basic & Diluted (₹)6.184.74.58
RONW (%)18.2721.2125.69
NAV (₹)33.1422.1717.5
ROE (%)21.1923.7129.92
ROCE (%)18.4617.3418.59
Post issue Share Capital78.28  
FV5.0  
IPO price256.0  
EPS Fy233.8  
PE Fy2366.9  
EPS Fy245.0  
PE Fy24 50.9  
Market cap in Lacs4,008  
Market cap / Sales1.63  
  • The anchor book got good response from mutual funds. SBI Mutual Fund, HDFC Mutual Fund, Kotak Mahindra Mutual Fund, Eastspring Investments, Optimix Wholesale Global Emerging Markets Share Trust, HSBC Mutual Fund, and Edelweiss Trusteeship participated in the company’s one-day anchor book.
  • Compared to listed peers
Company/ FY24 figuresCMP Rs.Revenue Rs. CrNet Profit Rs. CrNPM (%)PEMacp/salesRonw(%)
Bansal Wire Industries2562,466.0078.83.2%50.91.6318.46
Rajratan Global Wire 590890.0072.008.1%41.73.3615.41
DP Wires Limited4621,003363.6%19.70.7117.39
Bedmutha Industries 238812212.6%36.80.9519.04
  • Steel wire industry has grown at a CAGR of 6.90% from FY2019 to 2023, driven by increased infrastructure development and expansion in the automobile sector
  • The company has a customer base of more than 5,000 clients spanning across various industrial sectors.
  • Company has domestic and international clients which includes HK Automotive Components India Private Limited, Hettich, Hi-Lex India Private Limited, KEI Industries, Limited, Lapp India Private Limited, Suprajit Engineering Limited, Helical Springs, Haver Standard India Private Limited, RR Kabel Limited,, Remsons Industries Limited, ASK Automotive Limited, among others.
  • Current debt equity ratio of 1.6:1 will move down to 0.1:1 after the IPO.
  • The Company is setting up India’s largest single-location steel wire manufacturing facility at Dadri, India and amongst the largest in Asia.
  • I intend to apply in Bansal Wire IPO even as the priced being asked in quite stiff (PE 50x) . Positives are its entry into specialty wire products which have good growth potential. It is incurring considerable capex for expansion.
  • Due to current market conditions good subscription is expected.
  • GMP as reported on social media has been Rs.60 (23%)
  • This post is exploratory and educational purposes only. Please do your own diligence before investing in SME IPOs like this.
  • Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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