Bansal Wire IPO opens on July 3: Check price band, lot size and key financials ahead of subscription

Bansal Wire IPO subscription is set to open on Wednesday, July 3. The initial public issue of the stainless steel wire manufacturer will close on Friday, July 5. The public issue of the company is valued at ₹745 crore.

Bansal Wire IPO is a book-building offer, comprising a fresh issue of 2.91 crore shares. The mainboard IPO listing date has been tentatively fixed as July 10. Bansal Wire shares will be listed on the BSE and NSE.

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Bansal Wire IPO price band has been fixed at ₹243 to ₹256 per share and the retail investors can bid for a minimum of 1 lot comprising 58 shares, which aggregates to an investment of ₹14,848. The allotment of the wire manufacturer’s shares is likely to be finalised by July 8.

Here’s a look at the company’s business model, market share, competitors and other key details you should know before bidding.

Bansal Wire business model

Bansal Wire Industries Limited operates in three major segments: high-carbon steel wire, low-carbon steel wire (mild steel wire), and stainless steel wire. The company’s product portfolio comprises 3,000 different types of steel wire products, including wires of varying sizes ranging from very thin to very thick (0.04 mm—15.65 mm).

According to the Red Herring Prospectus (RHP), the company operates on a ‘Cost Plus model’, and is focused on staying immune to commodity price fluctuations. Additionally, the company also employs a de-risking strategy under which no single customer accounts for more than 5% of its sales, and no individual sector or segment adds more than 25% to the company’s sales.

Bansal Wire’s manufacturing units are located in Mohan Nagar and Loni Industrial Area in Ghaziabad, Uttar Pradesh, and Bahadurgarh in the Jhajjar district of Haryana.

Bansal Wire market share

The wire manufacturer claims in its RHP that it is the largest stainless steel wire manufacturing company in India, with a 20% market share, and the second largest steel wire manufacturer by volume as of FY23.

The wire maker has a presence across India and exports its products to over 50 countries. In the last three fiscal years, the company achieved an export turnover Compound Annual Growth Rate (CAGR) of 47.15%.

Bansal Wire Industries competitors

The company’s competitors, which have similar operational capabilities, include Rajratan Global Wire Limited, H D Wires Private Limited, Systematic Industries Private Limited, Nirmal Wires Private Limited and Viraj Profiles Private Limited.

The company also competes with key industry players such as Rimjhim Stainless Limited, Miki Steel Works Private Limited, Bedmutha Industries Limited, Kataria Industries Private Limited, Bajrang Wire Products India Private Limited and Synergy Steels Limited.

Bansal Wire Financial details

The wire manufacturer’s revenue for the fiscal year ended March 31, 2024, grew by 2.1% to ₹2,466 crore against ₹2,413 crore in the preceding fiscal. In FY24, the company’s profit after tax (PAT) surged over 31% to ₹78.7 crore compared to ₹59.9 crore in FY23.

Between FY22 and FY24, the company saw a 3% CAGR rise in its revenue from operations and 11% in its profit. Moreover, the demand for wire rod production is expected to grow at a CAGR of 6.5% to 7.5% between FY23 and FY27, which could benefit the company.

Bansal Wire IPO key strengths and risks

Strengths

Bansal Wire is among the largest players in the stainless steel wire industry. The company claims that it derives many benefits from its brand equity. These include securing raw materials at competitive costs and recruiting and retaining skilled employees.

The company has a diversified customer base across industries, and its key clients include NHK Automotive Components India, Hettich, KEI Industries Limited, RR Kabel Limited, Remsons Industries Limited, and ASK Automotive Limited.

It has an extensive wire product portfolio that is well-mixed of high-volume and higher-margin products. The company offers over 3000 stock-keeping units (SKUs).

The company claims in its RHP that its leadership team comprises seasoned whole-time directors, key managerial personnel and senior management with extensive experience in the steel wire industry.

Bansal Wire Risks

According to the RHP, the shortages in supply of raw materials can have a material adverse effect on the company’s business, financial condition, results of operations and cash flows.

The company mentioned that its manufacturing facilities and registered office are located on leasehold lands and rental basis. The company mentioned in the RHP that if it is unable to renew its existing leases or relocate its operations it could negatively impact the company’s business.

The wire manufacturer said that the raw materials it uses are subject to volatilities such as increases or fluctuations in raw material prices.

According to Bansal Wire, the company is dependent on the performance of the steel wires market. Shifts in conditions affecting the steel wires market can adversely impact its business.

The wire maker mentioned in its RHP that it operates in a labour-intensive industry and is subject to stringent labour laws and any strike, work stoppage or increased wage demand by employees could negatively affect its business.

Bansal Wire IPO price band has been fixed at ₹243 to ₹256 per share and the retail investors can bid for a minimum of 1 lot comprising 58 shares, which aggregates to an investment of ₹14,848. The allotment of the wire manufacturer’s shares is likely to be finalised by July 8.

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