Introduction:
The Initial Public Offering of Plaza Wires Limited will hit the markets on Friday, 29 September 2023. At the upper IPO price band of Rs. 54 per equity share, the company plans to raise up to Rs. 71.28 crores from public investors. The bidding for the IPO closes on 4 October, and the proposed date for listing shares is Thursday, 12 October 2023.
Continue reading to know more about Plaza Wires IPO, including price band, lot size, face value, etc., and the issuing company’s financials, strengths, and weaknesses.
Open Demat Account with us to start investing!
About Plaza Wires Limited:
Plaza Wires Limited is engaged in the business of manufacturing and selling wires, cables, and Fast-Moving Electrical Goods (FMEG). Its product portfolio in the wires and cables segment comprises house wires, low-tension aluminium cables, flexible industrial cables, and submersible industrial cables. The company also markets power control cables, LAN cables, CCTV cables, and solar cables from third-party manufacturers.
In the FMEG segment, the company’s product portfolio comprises electric fans, water heaters, switches, PVC tapes and conduit pipes, and other electrical accessories. All products are manufactured with “BIS” and “QCL” certifications and are sold under various brand names, including Plaza Cables, Action Wires, and PCG.
As of 31 March 2023, the company had an extensive pan-India distribution network, including 1,249 authorised dealers and distributors, three branch offices, one branch office cum godown, and four warehouses.
Exciting opportunities ahead: Don’t forget to apply for Upcoming IPOs!
Key Strengths of Plaza Cables Limited
The primary strengths of the company as highlighted in its Red Herring Prospectus (RHP) include:
- Boasts an extensive product portfolio catering to diverse customer segments and markets
- A robust distribution network comprising 1,249 authorised dealers and distributors
- Has the ability to capture the pan-India market
- Known for providing high-quality products at reasonable prices
- Planning to establish a new manufacturing facility to expand its production capacity and product portfolio
- One of the fastest-growing wire and cable manufacturing companies in Northern India
Key Risks or Weaknesses Highlighted:
Below are the key risks or weaknesses associated with Plaza Wires Ltd.:
- Operates in a highly fragmented and competitive industry
- The absence of long-term agreements with dealers or distributors can hurt the business
- Shortage or disruption in the supply of raw materials can reduce the company’s efficiency
- Unforeseen surges in raw material prices can impact the company’s financial health
- The company requires a large amount of capital to run its business
- Adherence to government’s quality-control requirements can be a challenge
Financial Snapshot of the Company:
The table below captures the financials of Plaza Wires Ltd. for the last three fiscals. All details are as specified in the company’s RHP dated 12 September 2023 on the Securities and Exchange Board of India (SEBI) website:
*Amount in Rs. Crores
As you can see, the company’s revenues and profits have grown steadily in the last two financial years. The profit margin is on the lower side but it can be attributed to the high competition in the industry. The ROCE of 16% in the latest financial year is quite impressive for a capital-intensive business.
Details of the IPO
The estimated issue size of Plaza Wires IPO is Rs. 71.28 crores. The IPO comprises a fresh issue of 1.3 equity shares with a face value of Rs. 10 per share. The issue opens for public subscription on 29 September 2023 and closes on 4 October 2023. 75% of the offer has been reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and the remaining 10% for retail investors.
As a retail investor, you can apply for a minimum of 277 shares (one lot) and in multiples thereof in the price band of Rs. 51 to Rs. 54 per share. Refer to the table below for more details:
The concluding statements
If you are planning to invest in Plaza Wires IPO, you must carefully analyse the issuing company’s financials, strengths, weaknesses, and other IPO details. Based on your investment goal, you can invest for listing gains or long-term profits.
A Demat account is necessary to invest in IPOs. If you do not have a Demat account, you can open it for free with Motilal Oswal.
Related Articles: How to Analyse an IPO | What is IPO Grading? | What is Cut Off Price In IPO Application
Financial Calculators: SIP Calculator | SWP Calculator | Compound Interest Calculator | EMI Calculator | FD Calculator | Retirement Calculator | Option Value Calculator | Inflation Calculator | Lumpsum Calculator