Bansal Wire makes stellar debut; lists at 39% premium over issue price

The stock listed at Rs 356, a 39 per cent premium over its issue price of Rs 256 per share on the National Stock Exchange NSE on Wednesday.

Bansal Wire listing: Bansal Wire Industries has made a healthy stock market debut, with shares getting listed at Rs 356, a 39 per cent premium over its issue price of Rs 256 per share on the National Stock Exchange (NSE) on Wednesday. The stock of iron & steel products company debuted at Rs 352.05, a 38 per cent above its issue price, on BSE.

At 10:16 AM, Bansal Wire was trading at Rs 341.40, up 33 per cent against its issue price. The stock hit a high of Rs 372 and a low of Rs 336 on the NSE in intra-day trade. As many as 18.6 million shares have changed hands on the counter in first 16 minutes of trading on the NSE and BSE.

 

The initial public offer (IPO) of Bansal Wire got healthy response with issue oversubscribed 62.76 times. The quota for non-institutional investors (NIIs) received 54.21 times subscription, while retail individual investors (RIIs) portion got subscribed 14.37 times. The qualified institutional buyers (QIB) category received 153.86 times subscription.

The funds will be used for the payment of debt, to support the working capital requirements of the company, and for general corporate purposes.

Bansal Wire, a manufacturer of steel wire products, operates across three segments, catering to a diverse customer base exceeding 5,000. With a comprehensive product portfolio of over 3,000 SKUs, the company offers a favorable mix of high-volume and higher-margin products, contributing to a stable and consistent margin profile.

The steel wire industry witnessed a significant compound annual growth rate (CAGR) of 6.9 per cent over FY2019-23, growing to 5.6 mt, driven by an uptick in infrastructure development activities across the country and growing production in the automobile industry. Demand is expected be 8-10 per cent CAGR between FY2023 and 2028, growing to eight-nine mt, due to increasing budget allocation of central and state governments for infrastructure development and expansion of the automobile industry.

The Indian steel wire industry is well-positioned to benefit from the global shift from China-based manufacturing to China plus one strategy, resulting in new opportunities for Indian manufacturers in the global market, Capital Market said in IPO note.

Bansal Wire's financial performance has been positive, demonstrating consistent growth in both revenue and profitability. However, some key risks require careful consideration. The company's operations are susceptible to fluctuations in raw material supply and costs due to the inherent volatility of the steel market.

Additionally, the steel wire industry is highly competitive and fragmented, presenting challenges for market share expansion, according to the brokerage firm Swastika Investmart.

Bansal Wire surpassed pre-listing expectations with a stellar debut on the stock exchanges. This impressive performance outshines even the pre-listing buzz.

The company received a robust subscription, highlighting significant investor confidence in Bansal Wire's established position, diverse product portfolio, and consistent financial performance. However, it operates in a highly fragmented and competitive market.

Overall, Bansal Wire's listing performance surpasses pre-listing expectations and signifies investor confidence in the company's potential. However, careful consideration of the identified risks is still crucial, said Shivani Nyati, Head of Wealth, Swastika Investmart.