Saturday, September 30, 2023

Plaza Wires Ltd IPO oversubscribed 4.69 times on Day 1; Retail Investors lead the way


The Initial Public Offering of Plaza Wires Limited was subscribed 4.69 times on the first day of bidding.


The issue received bids of 4,45,60,713 shares against the offered 94,96,114 equity shares, at a price band of ₹51-54, according to the data available on the stock exchanges.


Retail Portion was the most subscribed with 26.60 times, followed by Non-Institutional Investors with 4.76 times, whereas Qualified Institutional Buyer Portion have just started bidding. The issue kicked off for subscription on Friday, September 29, 2023 and will close on Thursday, October 5, 2023.


A day prior to the opening of the issue, Plaza Wires Ltd had raised Rs 20 crore from anchor investors. Investors who participated in the anchor were Chanakya Opportunities Fund, and Astorne Capital UCC-ARVEN.


Leading brokerages like and Indsec Securities have given a “SUBSCRIBE” rating to the issue, citing that, at the upper price band of Rs. 54 per share, is reasonably priced with a price-to-earnings (P/E) ratio of 31.5x based on FY23 earnings (Post issue) and is in line when compared to its listed peers.


In addition, market experts are closely monitoring Plaza Wires, anticipating a positive reception from investors due to its competitive pricing and promising outlook within the sector.


Pantomath Capital Advisors Private Limited is the sole book running lead manager and KFin Technologies Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.              


Company Information


The company's product mix includes various types of wires and cables, and FMEG such as electric fans, water heaters, switches and switchgears, PVC insulated electrical tape, and PVC conduit pipe and accessories. In 2021, the company launched a line of house wire under the brand "Action Wires" for products in the low-cost range. According to a Resurgent India report quoted in its DRHP, it is one of the fastest growing manufacturers in the wires and cables industry in northern region in India, and provides extensive range of wires and cables, under its flagship brand “PLAZA CABLES” and home brands such as “Action Wires” and “PCG”.


The company’s business model engages dealer and distribution network via 1249 authorized representatives to sell and market the company's products, including sales through C&F agents, securing government bids for supply to government projects, and direct sales to infrastructure projects. It competes with listed peers which includes Cords Cable Industries Limited, Ultracab (India) Limited, V-marc India Limited, Dynamic Cables Limited, and Paramount Communications Limited.


It's manufacturing facility in Baddi has an installed production capacity of 12,00,000 coils per annum. It has proposed to set up a manufacturing facility to add 8,37,000 coils per annum to manufacture new products such as fire proof/survival wires, LT aluminium cable and solar cables.


The company’s revenue from operations grew 3.23% from ₹ 176.77 crore in Fiscal 2021 to ₹ 182.49 crore in Fiscal 2023 primarily due to an increase in sales of wires and cables. However, profit after tax grew 26.14% to ₹ 7.51 crore for fiscal 2023 against ₹ 5.95 crore for fiscal 2022.


The table below shows subscription data for all the categories of investors:



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