Bansal Wire Industries Limited – About the Company

Incorporated in the year 1985,Bansal Wire Industries Limited is one of the largest stainless steel wires manufacturing and in terms of volume of production it is the second largest steel wires manufacturer in India. Company operates and manufacturers into the three segments - high carbon steel wire, mild steel wire (low carbon steel wire), and stainless steel wire.

With the production of 72,176 MTPA and 206,466 MTPA of stainless steel wire and steel wire respectively, it is representing 20% and approximately 4% market share in the industry.  The company catering  to  a  wide  range  of  sectors  such  as  automotive, general  engineering, infrastructure, hardware, consumer durables, power and transmission, agriculture and auto replacement.

With the installed capacity of 259,000 MTPA, of mild steel, high carbon and stainless steel Wires Company is operating from its four existing manufacturing facilities located in National Capital Region, India. This also includes manufacturing facility of BSPL, its subsidiary, located at Bahadurgarh, Haryana.

It’s all the existing manufacturing facilities are operating at its optimum capacity utilization and company is also going to set up the largest single location manufacturing facility of steel wire in Dadri, India that will be one of the largest capacities in Asia.

With  a  well-diversified  base  of  more  than  5,000  customers  spanning  various  sectors,  company has  established  a robust network and pan  India presence  and  extended its  product  exports to more  than  50  countries in the international market.

Bansal Wire Industries IPO Objectives

By this IPO company plans to raise Rs 745 cr entirely fresh issue primarily for its outstanding liabilities. According to Draft Red Herring Prospectus (DRHP) filed with SEBI, entire amount will be used to repay loans and for working capital requirements.

Also Read: What is DRHP in IPO: How to Read & Difference between DRHP and RHP

Bansal Wire Industries IPO Details:

Bansal Wire Industries IPO Issue Price & Size

The issue price of the Bansal Wire Industries IPO is between the price ranges of Rs 243 to Rs 256. Investors can bid in the Bansal Wire Industries IPO between these price bands. The total issue size of Bansal Wire Industries IPO is Rs 745 crore that will be entirely fresh issue of equity shares.

Bansal Wire Industries IPO Launch Date

The Bansal Wire Industries IPO will be open on July 3, 2024 and closed on July 5, 2024. Means investors can bid between July3 to July 5. The basis of allotment date is scheduled for July 8 and date of listing is announced for July 10 by the company.

Bansal Wire Industries Financial Statements:

Source: DRHP

Bansal Wire Industries Financial Performance

Topline growth for H1FY24 Reported around Rs 1151 cr while the topline growth for FY23 Stood around Rs 2400 cr posted Compounded annual growth rate of more than 27% as compare to Fy22. EBITDA and Bottom line for first half of current financial year is at Rs 65.49 cr and 40 cr.

Compare with previous year (  FY22 ) Bansal industries reported CAGR of more than 16 % in EBITDA and nearly 22% in bottom line for FY23.

Bansal Wire Industries IPO Promoters & Shareholding of the Company

Arun Gupta and Anita Gupta are the main promoters of the company holding 24.12% and 24.24% stakes in the company. While, Pranav Bansal and Arun Kumar Gupta HUF are the other major shareholders of the company having 10.85% and 14.4% stakes in the company. For details of other promoters group and shareholders of the company check the details below.

Source: DRHP

Why Invest in Bansal Wire Industries IPO?

Investing in the Bansal Wire Industries IPO, you need to consider various factors that affect the revenue growth of the company. The competitive strength helps to grow its business ahead of its competitors, while the risk factors affect can affect the normal course of business.

Also Read: What are the Risk Factors Involved in Applying for an IPO

Hence, while investing in the IPO, or any other company already listed in the stock market, you need to check the fundamentals of the company, that will help to know the strength and weakness of the company. In respect of the same we brought here the competitive strength and risk that you should consider while investing in the Bansal Wire Industries IPO.

Also Read: Why is Fundamental Analysis Important for Investing in Stocks

Competitive Strengths:

• India has been the second largest global steel producer since CY 2018. Of the 1,878 MT of global crude steel production, India accounted for 6.64% share, or ~125 MT, in CY2022. Globally, crude steel production increased to 1,878 MT in 2022 from 1,827 MT in 2018, a CAGR of 0.70%, while India’s crude steel production grew at 4.02% CAGR, higher than the world average.
• In India, the steel industry has witnessed significant growth at a CAGR of 5.74% between fiscals 2018 to 2023, rising to 119.90 MT in fiscal 2023 from 90.72 MT in fiscal 2018 because of aggregate effect of growth in the end-use sectors  of  steel  such  as  automobile,  infrastructure,  construction,  etc  and  market  volatility  faced  during  the pandemic. However, owing to growth prospects in these sectors further it is expected to grow faster at a CAGR of ~7% till fiscal 2027, rising to 155-160 MT.
• Bansal Wire Industries is the largest player by volume of 72,176MTPAin stainless steel wire manufacturing companies and second largest steel wire manufacturing company overall by volume of 206,466MTPAin India, representing 20% and approximately 4%market share as of March 31, 2023, respectively. Hence, there is scope for the company to expand its market share.
• In order to ensure its pan-India presence across all regions of India Company has built its own sales team of more than 50 experienced professional employees that enables it to cater to more than 5,000 customers spread across various sectors since 2021. Further, by expanding its sales network in India, company is going to get benefited from greater connections and exposure to potential customers in untapped regions.
• Company is going to drive various benefits from its brand equity including its ability to secure raw material at competitive costs, recruit and retain skilled employees, increase the customer count through high referral rate, high 173 customer retention rate and ability to attract diversified companies as customers.
• Company has well-diversified customer base exceeding 5,000 customers with presence across various industrial sectors like automotive, cables,  fencing,  infrastructure  and  None  of  its customer  contributed to more  than  5.00%  of  its sales and  no individual sector or  segment constituted more  than 25.00%  of its  sales in last three years shows that company is well posed with diverse  portfolio of customers to ensure its revenue from various industries.
• To expand its operations and for cost effectiveness has also entered into industrial lease agreements dated January 8, 2024,with two of  our  Group Companies, Bansal  High  Carbons  Private  Limited  and  Balaji  Wires  Private  Limited, respectively, to use the premises and equipment installed in their manufacturing facilities.
• Company has intend to leverage the suite of globally accredited products to grow its exports business and further increase the overseas presence by  increasing  the  customers  base  and  global  representatives  and  setting  up  warehouses,  as  and when required.
• And company will also introduce new products like wire for elevator ropes and springs, including the manufacturing of speciality wire products, i.e., steel cord and IT wire for automotive sector and low relaxation pre-stressed concrete steel products for infrastructure sector, that have a high potential in export markets and will also help it to increase the EBITDA margins from current level.
• As a part of our Company’s growth strategy, it is strategically expanding into the retail segment in the agriculture sector across India that enjoy higher profit margins with the galvanized wires products such as fencing, barbed wire, farming wire, etc. ensuring its presence across both business-to-business and business-to-consumer segments.
• To increase its operating margins it is focusing on high margin products and adding specialty wire segments. It is intend to focus on manufacturing of shaped wire in all three product streams, i.e. high carbon steel wires, mild steel wires (low carbon steel wires) and stainless steel wires which are very high margin products and being used in the growing sectors like automotive, power and transmission and infrastructure.
• And to enhance its operational efficiency company has installed  the equipment/machines with higher    efficiencies than the olderversion of the equipment/machines which will increase the pay-off(feeding unit) carrying size and take up (final product)carrying capacity by2-2.5  times which  will  result in  higher efficiencies in  all manufacturing process leading to higher production with the same resource and reduction on manpower.
• Furthermore, the company is strategically planning to introduce a new specialty wires segment through an upcoming plant in Dadri, aiming to enhance its market presence and facilitate growth in the forthcoming fiscal periods.
• Company is also in  process  of setting  up  a  manufacturing  facility  with an installed capacity of 346,000  MTPA in  total spreads across  32  acres    at Dadri. This facility will be one of the largest in Asia and largest steel wire plant in India and is strategically located, that we will facilitate the benefit of economies of scale providing a competitive edge in the industry.
• At the financial end, the revenue, EBIDTA and Net Profit of the company has grown well at CAGR of 28%, 16% and 22% from FY21 to FY23. The company has also tried to maintain the EBIDTA margin around 5%, while the Net Profit margin of the company has slightly improved in the last three years. Further paying-off the debt with fund raised through this IPO, the net profit margin of the company will improve creating the more earnings per share for the shareholders.

Risk Factors:

• As per the CRISIL Report, the Indian steel wires industry is undergoing shifts towards branded play. And it is facing the significant competitive pressures in its business. Hence inability to compete effectively would be detrimental to its business and prospects for future growth.
• The growth and performance of Bansal Wire Industries is highly dependent on the performance of the steel wires market. Any adverse changes in the conditions affecting the steel wires  market  can  adversely  impact  its  business operations and  financial  condition of the company.
• Company is planning to expand into new geographical regions and may be exposed to significant liability and could lose some or all of its investment in such regions, as a result of which the business, financial condition and results of operations could be adversely affected.
• To keep  abreast  of  the  most  updated  technology  and  respond  effectively  to  changing  customer preferences  and  requirements,  company  develop  and  produce  new  products  to  meet  the customers’ demand in a timely manner. But further unable to anticipate product trends and consumer preferences and develop successful new products may not be able to maintain or increase the revenues and profits of the company.
• Improper storage, processing and handling of the raw materials, work products and products could damage our inventories and, resulting has an adverse effect on the business operations.
• The growth and success of the company depends on its ability to execute the growth strategies. If it is unable to sustain or manage the growth as per the expectations it could adversely affect the future growth plan of the company resulting it may adversely affect its business operations.
• There are certain legal proceedings running against the company, its Promoters, Directors, and its Subsidiary and against the Group Companies. Any kind of unfavorable outcomes or legal actions against any of these entities may have an adverse effect on its business prospects.

Also Read: Types of Risks Associated with Investing in the Stock Market

Bansal Wire Industries IPO Grey Market Premium (GMP)

The grey market premium (GMP) in the primary market is known as the premium price that is speculated in the grey market, and it keeps fluctuating as per the demand and supply of shares in the primary market. Grey market is an unofficial ecosystem where stocks of unlisted companies start trading when the IPO is launched till the date of the allotment and listing.

Also Read: What is Grey Market Premium in IPO: How is GMP Calculated &Reliable

However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share, but never consider only this as a reliable factor while evaluating the share price of the unlisted company. As there are various factors that affect the stock market in India and the stock price of individual companies listed on the stock exchanges or trading in the secondary market.

As per the various sources, the Grey Market Premium or GMP of the Bansal Wires Industries is currently hovering around Rs 65 that means shares are trading at the upper band issue price of Rs 321 with premium in the grey market. GMP is that speculative price that investors are ready to pay above the upper band of IPO issue price.

Bansal Wire Industries IPO Review & Analysis

The earnings per share (EPS) of the company for the full year financial ended 2023 stood at Rs 4.7 per share. However, the EPS of the company for the first half of the FY24 was Rs 3.06 per share and if you annualized this EPS for the full year FY24, then it will stand at around 6.12 that can be used to calculate the price to earnings ratio (PE) while considering the upper price band of the IPO share price.

Also Read: What to Check Before Buying IPO: Things to Know & Is it Safe

If Bansal Wire Industries IPO is launched with high share price, means it PE is at very high compared to industry PE or compared to its peer members, then you can either avoid applying in the Bansal Wire Industries IPO, or can invest only with the long-term investment point of view.

Also Read: Why You Should Invest in the Stock Market: Reasons  & Benefits

While on the other hand, if the Bansal Wire Industries IPO is issued at discounted price or available at lower PE compared to its listed peer group companies, then you can subscribe to the issue or apply with the medium to long-term investment prospects.

Also Read: Benefits of Investing in the Stock Market: Advantages of Share Market

How to Apply for Bansal Wire Industries IPO?

If you want to apply in the Bansal Wire Industries IPO you need a trading account and demat account. If you don’t have you can apply here at Moneysukh, with lowest brokerage charges demat account and various other additional features to trade in equities, commodities and currency market.

Also Read: Equity or Commodity which is better for Trading or more Profitable

Here at Moneysukh apart from one-click IPO application procedure you will also get the best online platform for trading and investing in stocks of all the companies listed and traded on the NSE and BSE. Apart from an experienced braking company, it is also one of the best discount brokers in India providing the advantages of best trading apps to customers at lowest pricing and broking charges.

Also Read: How to Start Algo Trading in Moneysukh: A Best Algo Trading Platform

At Moneysukh, you will get the facility trade with most advanced trading software and algorithms like AlgoBulls, Quantman, Trade Radar, TradeTron, Keev, and FoxTrader are integrated best charting system TradingView to provide you uninterrupted trading at lowest cost. Here you can also choose the algo-trading with best algo-trading platforms and most popular and profitable algo-trading strategies to make your trade journey a profitable journey. However, right now to apply in the Bansal Wire Industries IPO you can follow the steps given below.

Steps to Apply for Bansal Wire Industries IPO:

Step 1: As soon as the bidding for the Bansal Wire Industries IPO starts you can apply.

Step 2:Just browse trade.moneysukh.com and log in with your User ID & password.

Step 3:Now go to the IPO section and click on the Bansal Wire Industries IPO.

Step 4:Here you have to fill the required details like price, quantity, and so on.

Note: While applying in any IPO, make sure bid at the cutoff price and then submit your application. 

Step 5:Now before submitting your IPO application make the required payment and then submit.

How to Check Bansal Wire Industries IPO Allotment Status?

The basis of the allotment in the IPO starts once the online bidding is closed. And allotment procedure is followed as per the oversubscription of the IPO. If the IPO is oversubscribed, then for every individual there is less of getting shares in the allotment. However, you can increase your chances of allotment in the IPO, if at the time of applying in retail category or HNI category you follow tips and tricks.

Also Read: How to improve Allotment chances: 15 Tips for investing in IPO

Anyway, if owing to high demand of shares the IPO of Bansal Wire Industries is oversubscribed and you don’t get allotment of any share, then your money will be returned back into your bank account or the fund will be unblocked if applied through the ASBA process. Though, if you get the allocation of any shares in the allotment, then the shares will be credited into your demat account before the listing day.

Also Read: How to check IPO allotment status on NSE, BSE through Moneysukh