Plaza Wires IPO
Plaza Wires Limited is all set to launch its Initial Public Offering (IPO) for subscription starting on September 29, 2023. The company has been experiencing robust revenue growth, and in this article, we’ll provide you with a comprehensive overview of the Plaza Wires IPO, including key dates, size, price range, positive and risk factors, and a thorough review.
Plaza Wires IPO – Key Details
| IPO Opening Date | 29-Sep-23 |
| IPO Closing Date | 04-Oct-23 |
| IPO Listing Date | 12-Oct-23 |
| Issue Type | Book Built Issue IPO |
| Face Value | Rs 10 per equity share |
| IPO Price band | Rs 51 to Rs 54 per equity share |
| Lot Size | 277 Shares |
| Listing at | BSE and NSE |
| Total Issue Size | Rs. 71.28 Crores |
About Plaza Wires Limited
Plaza Wires Limited is a certified company holding ISO 9001:2015 and 14001:2015 certifications. They specialize in manufacturing and selling wires, LT aluminum cables, and fast-moving electrical goods (FMEG) under well-known brands such as “PLAZA CABLES,” “Action Wires,” and “PCG.” Their aim is to offer high-quality products at competitive prices, particularly in the domestic wire and cable industry.
In 2021, they introduced an affordable house wire line under the “Action Wires” brand. They’ve become a growing player in the northern Indian wires and cables industry, offering a wide range of products, including electric fans, water heaters, switches, and more. According to Resurgent India Research, the industry itself is on an upward trajectory, with an expected CAGR of approximately 14.50% to reach ₹1550.00 billion by Fiscal 2026.
Plaza Wires’ primary product offerings include building wires, industrial cables, and cables for submersible pumps & motors. For other products like power control cables and networking cables, they collaborate with third-party manufacturers who meet quality standards such as the Bureau of Indian Standards (BIS). The company employs various distribution channels, including dealers, government tenders, and direct sales to infrastructure projects. With over 1249 authorized dealers and distributors across India, they have a significant presence in states like Delhi, Uttar Pradesh, Haryana, Kerala, and Rajasthan, contributing to their revenue growth.
In summary, Plaza Wires Limited is a certified company operating in the Indian wires, cables, and FMEG sector, offering a diverse product range under various brands. They are experiencing growth in the northern region and are poised for further expansion in a thriving market. Their distribution channels and supply chain contribute to their substantial presence in key states, driving revenue growth.
Plaza Wires IPO Dates and Timetable
| IPO Opens on | 29-Sep-23 |
| IPO Closes on | 04-Oct-23 |
| Basis of Allotment | 09-Oct-23 |
| Initiation of Refunds | 10-Oct-23 |
| Credit of Shares to Demat | 11-Oct-23 |
| Listing Date | 12-Oct-23 |
| Cut-off time for UPI mandate confirmation | 04-Oct-23 |
IPO Objectives
The Plaza Wires IPO size is ₹71.28 Crores, and the funds will be allocated for the following purposes:
- Funding the capital expenditure to establish a new manufacturing unit for house wires, fire-resistant wires & cables, aluminum cables, and solar cables to expand the product portfolio.
- Funding the working capital requirements of the company.
- General corporate purposes.
Valuation of Plaza Wires IPO
The IPO price band is set at ₹51 to ₹54 per share. Considering the last year’s FY23 EPS of ₹2.46, the P/E ratio falls in the range of 22x. If we consider the last 3 years’ weighted EPS of ₹2.11, the P/E ratio ranges around 26x.
Listed peers like Dynamic Cables are trading at a P/E of 32.2x (highest), and Cords Cable Industries is trading at a P/E of 16.6x (lowest), with the industry average P/E at 24.5x. Therefore, the IPO Price band, with a P/E of 22x to 26x, seems reasonably priced.
Financial Insights into Plaza Wires
| Financial Year ending / Period ending (Amt in Crores) | |||
| PARTICULARS | FY21 | FY22 | FY23 |
|---|---|---|---|
| Assets | 99.28 | 104.17 | 112.10 |
| Revenue | 145.60 | 176.94 | 182.60 |
| Profit After Tax | 4.24 | 5.95 | 7.51 |
| Net Worth | 39.48 | 45.52 | 53.08 |
| Reserves and Surplus | 35.66 | 14.96 | 22.53 |
| Total Borrowing | 43.30 | 40.09 | 39.68 |
Plaza Wires IPO GMP (Grey Market Premium)
As of now, Plaza wire IPO GMP is 25 RS – Check daily IPOGMP update – Click here .
Positive Aspects of Plaza Wires IPO
When considering investing in the Plaza Wires IPO, it’s important to take into account the positive aspects:
- Growing Industry: Plaza Wires operates in the wires, cables, and FMEG industry in India, which has shown significant growth in recent years. This trend is expected to continue, creating a potentially favorable market environment.
- Diverse Product Portfolio: Plaza Wires offers a wide range of products under different brand names. This diversity allows them to cater to various market segments, increasing revenue potential.
- Expansion Plans: The IPO proceeds will be used for capital expenditure to set up a new manufacturing unit. This expansion indicates the company’s commitment to growth and innovation.
- Strong Financials: The company has shown consistent revenue growth and profitability over the years, which can instill confidence in potential investors regarding the company’s financial health.
- Experienced Management: With over a decade of operating history, Plaza Wires is led by experienced management, and the company has established a substantial presence in key states of India.
- Reasonable Valuation: The IPO price band appears reasonable, considering the company’s financials and growth prospects, which may attract investors looking for potential value.
Risk Factors in this IPO
However, it’s important to acknowledge the potential risks associated with the Plaza Wires IPO:
- Intense Competition: The financing industry is highly competitive, leading to pricing pressures and the need to retain existing customers while attracting new business. The company’s growth prospects depend on its ability to effectively compete in this competitive environment.
- Uncertain Growth: While the company has experienced growth in the past, there is no guarantee that this growth will continue at a similar rate or that the company can manage rapid growth effectively. Ineffective implementation of growth strategies could have adverse effects on the company’s business.
- Market Conditions: Difficult conditions in financial markets can have a negative impact on the company’s business, potentially leading to reduced revenue and income.
- Customer Defaults: High levels of customer defaults and non-performing assets can significantly affect the company’s financial health, including its business operations, financial condition, and future financial performance.
- Collateral Recovery: The ability to recover the full value of collateral or amounts sufficient to cover outstanding amounts due under defaulted loans may be challenging and could adversely impact
