By Bansal Wire Industries made a notable debut on the BSE and NSE, listing with healthy gains on Wednesday, July 10, despite the prevailing weak market sentiment. The shares of the stainless-steel wire manufacturer were listed at a 37.52% premium at ₹352.05 per share on the BSE, and with a 39.06% premium at ₹356 apiece on the NSE, compared to the issue price of ₹256.
The stock pared some of its initial gains and traded 33.40% higher at ₹341.50 on the BSE around 10:50 am, while the equity benchmark Sensex was down 1% at 79,560 at the same time.
Bansal Wire Industries raised ₹745 crore from its IPO, which was entirely a fresh issue of 2.91 crore equity shares. The price band for the issue was set between ₹243 to ₹256 per share. The IPO, which opened for subscription on July 3 and closed on July 5, saw a robust subscription of 59.57 times, receiving bids for 127.85 crore equity shares against 2.14 crore shares on offer.
The retail category of the offer was subscribed to 13.64 times, while the NII segment saw a subscription of 51.46 times and the QIBs category was subscribed to 146.05 times.
Experts see long-term growth prospects for Bansal Wire but believe the current valuations are stretched. Investors may consider booking profit for short-term gains, while those with a long-term horizon may hold their positions.
Shivani Nyati, the head of wealth at Swastika Investmart, pointed out that Bansal Wire shares surpassed pre-listing expectations with a stellar debut on the stock exchanges. Nyati advises investors to hold their positions even as she highlights that the company operates in a highly fragmented and competitive market.
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. Investors are advised to hold their position with a stop loss of ₹321.
Shivani Nyati
Prashanth Tapse, a research analyst and senior VP of research at Mehta Equities, noted that the Bansal Wire listing was in line with his expectations, given the demand received from all types of investors. Tapse sees valuations getting stretched and suggests that investors may consider booking profits after a healthy debut.
Post listing above 38% of the issue price gives a healthy opportunity to allotted investors to book profits as we had anticipated. We see the valuations are getting stretched post-listing, and the upside would be limited from here.
Prashanth Tapse
Tapse also pointed out that despite industry challenges and a stable margin business model, the management is confident that the company will experience multi-segmental growth. He believes that the company can consistently grow its topline in line with historical trends, which have grown by 18% CAGR, and that, due to business consolidations, it can grow more in the next year.
Parth Shah, a research analyst at StoxBox, highlighted that the issue is fairly valued on the financial front and advises market participants to hold the shares from a medium to long-term perspective. Shah is positive about the company’s growth prospects, emphasizing strong customer diversification to de-risk revenue impact and a diversified product portfolio.
Shah also noted the increase in steel consumption across infrastructure and believes that steel manufacturers like Bansal Wire are expected to benefit directly from domestic economic growth.
To follow up with the growing trends, the company plans to set up a new manufacturing unit, the largest steel wire manufacturing plant in India. The company also aims to expand its reach to other regions, i.e., the south and east, to garner additional market share.
Parth Shah
