July 2, 2024
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Stock Market

Bansal Wire Industries IPO 2024

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Stock Market

Bansal Wire Industries IPO 2024

Bansal Wire Industries IPO 2024: Bansal Wire Industries Limited is coming up with its Initial Public Offering. The dates of the IPO’s subscription opening and closing are July 3, 2024, and July 5, 2024, respectively. In this article, we will look at the Bansal Wire Industries Limited IPO Review 2024 and analyze its strengths, weaknesses, financials, and GMP. Keep reading to find out!

Bansal Wire Industries IPO 2024 – About the Company

Bansal Wire Industries Limited (BWIL) was incorporated on December 11, 1985. It specializes in manufacturing a wide range of wires with diverse applications across various sectors, including power and cable, automotive, fencing, infrastructure, agriculture, consumer durables, and general engineering. The company produces high and low-carbon steel wires, galvanized wires, cable armoring wires and strips, stainless steel wires, profile and shaped wires, and specialty wires, all of which serve multiple purposes.

Bansal Wire Industries Limited is the largest stainless steel wire manufacturing company and the second largest steel wire manufacturing company by volume in India. In fiscal 2023, they produced 72,176 MTPA of stainless steel wire and 206,466 MTPA of steel wire, representing approximately 20% and 4% of market share, respectively.

The Company meets diverse customer needs by manufacturing over 3,000 stock-keeping units. It will be the highest among all steel wire manufacturers in India, with sizes ranging from as thin as 0.04 mm to as thick as 15.65 mm.

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Customer Base

Bansal Wire Industries Limited has a customer base of more than 5000 customers spread across various industrial sectors. The Company has a diverse portfolio because no customers and no individual sectors or segments have contributed more than 5% and 25% of sales, respectively, in the fiscal year 2021 to September 30, 2023.

Bansal Wire Industries Limited has maintained an average customer retention ratio of 89.22% of their top 300 customers contributing 76.80%, 78.22%, and 78.20% of the sales for fiscals 2021, 2022, and 2023, respectively.

The company has a 38-year legacy and a diversified portfolio, serving sectors such as automotive, general engineering, infrastructure, hardware, consumer durables, power and transmission, agriculture, and auto replacement.

The chart will show the diversified portfolio of Bansal Wire Industries

(Source: RHP of the company)

Bansal Wire Industries IPO 2024 – Industry overview

India has been the second-largest global steel producer since 2018. The Indian steel industry had significant growth at a CAGR of 5.74% between fiscal 2018-2023, rising to 119.90 MT in FY23 from 90.72 MT in FY18. Steel growth will be affected by the market volatility faced during the pandemic.

(Source: RHP of the company)

The steel demand grew by 11.4% in FY22 and 13.08% in FY23. It is expected to grow by 10-12% in the fiscal year 2024. Steel demand will be backed by government infrastructure spending, strong demand from the automotive sector, and demand from the consumer goods sector. It is expected to grow at a CAGR of almost 7% until fiscal 2027. The production will rise to 155-160 MT.

The global crude steel production increased from 1827 MT in 2018 to 1878 MT in 2022, with a CAGR of 0.70%. while India’s crude steel production grew at 4.02% CAGR, higher than the world average

Global Crude Steel Production (2018–2022) and Share of Major Countries

(Source: RHP of the company)

Bansal Wire Industries IPO 2024 – Financial Highlights

(Source: RHP of the company)

In the financial parts Of Bansal Wire Industries, the total revenue of the company has increased massively from 2205.07 crores in FY22 to 2422.57 crores in FY23 and grew by 9.86%. The company’s net profit will be slightly higher from 57.29 crore in FY22 to 59.93 crore in FY23.

Bansal Wire Industries Limited’s EBITDA margin is 4.73% and its net profit margin is 2.47% in FY23. As of the six months ended of FY24, the company has earned a revenue of 1154.03 crores and maintained a net profit of 39 crores.

In FY23, Bansal Wire Industries Limited reported an ROE of 23.71% and an ROCE is to be 17.34%. Further, the company’s debt-to-equity ratio is 1.49%, which means the company has debt more than equity. However, the debt-to-quick ratio will be reduced compared to the previous year.

Peers of the Company

Bansal Wire Industries Limited’s peer competitor is to be Rajratan Global Wire Limited. It is listed in the stock market and has a total revenue of 898.68 crores. Bansal Wire Industries has more revenue compared to the peer competitors of Rajratan Global Wire Limited.

The below Images show the comparison of peer competitors of the Bansal Wire Industries Limited:

(Source: RHP of the company)

Strengths of the Company

Large Manufacturing Capacity: Bansal Wire operates from four existing manufacturing facilities and is setting up the largest single-location manufacturing facility of steel wire in Dadri, India, which will be among the largest in Asia.
Diverse Product Range: The company offers over 3,000 stock-keeping units (SKUs), the highest among all steel wire manufacturers in India, allowing them to meet diverse customer needs
Flexible Production Capabilities: The product mix and plant capabilities allow the company to switch or add production lines based on industry demands, ensuring flexibility and responsiveness.
Long-standing Customer Relationships: The company has maintained a balanced and resilient business model, with no single customer accounting for more than 5% of sales, and no individual sector or segment constituting more than 25% of sales.
Export Revenue: Bansal Wire has a significant export revenue share, contributing 14% to its total revenue, indicating a strong presence in international markets.
Financial Performance: Bansal Wire has shown steady improvement in sales and profitability, outperforming many of its competitors

Weaknesses of the Company

Limited Technological Advancements: Compared to global competitors, the company might lag in adopting the latest technological advancements, impacting efficiency and product quality.
High Working Capital Requirements: The business requires significant working capital to fund operations, especially during periods of expansion or increased demand
Dependence on Promoters: The business heavily relies on the promoters’ involvement and their expertise, posing a risk if key individuals are unavailable.
High Competition: The steel industry is highly competitive with several established players, which can impact market share and profitability
Raw Material Volatility: The company’s cost structure and profitability can be significantly impacted by fluctuations in the prices of key raw materials like iron ore, wire rods, and other consumables.
Geopolitical Risks: Export revenues expose the company to geopolitical risks and currency fluctuations, which can impact profitability and market stability.