In a much-anticipated event, Delhi-based wire manufacturer Plaza Wires is expected to make its market debut on Thursday, October 12, 2023, with a premium of over 40 percent, according to analysts Anushi Vakharia and Shivani Nyati.
The company's initial public offering (IPO) has seen an overwhelming response from investors, with subscriptions soaring to 161 times the offered quota. Retail investors, Qualified Institutional Investors (QIIs), and High Networth Individuals (HNIs) subscribed at rates of 374.81 times, 42.84 times, and 388.09 times respectively. The firm also witnessed a high grey market premium, a platform where IPO shares can be bought and sold before the listing.
Through the IPO, Plaza Wires raised Rs 71.28 crore ($9.6 million) by issuing 1.32 crore equity shares priced between Rs 51-54 ($0.69-$0.73) per share. The proceeds from the IPO will be directed towards setting up a new manufacturing unit for products including Plaza Cables and fast-moving electrical goods (FMEG). The project is estimated to cost Rs 24.41 crore ($3.3 million), while an additional Rs 22 crore ($3 million) will be allocated to meet working capital requirements.
The company has shown promising financial performance in the recent past. For the year ended March 2023, Plaza Wires reported an on-year growth of 26 percent in profit and a net revenue growth of 3.2 percent. The firm operates in a competitive market landscape with comparable peers including Cords Cable Industries, V-Marc India, Dynamic Cables, and Paramount Communications.
InvestingPro data shows that Plaza Wires has had a strong return over the last six months with a price total return of 7.98%, and a year-to-date price total return of 12.18%. The company's price is currently at 96.55% of its 52-week high, indicating a positive market sentiment towards the stock.
In addition, InvestingPro Tips highlights that Plaza Wires yields a high return on invested capital and holds more cash than debt on its balance sheet. These factors contribute to the company's financial stability and could potentially provide a cushion against any unforeseen market downturns. For more insightful tips and real-time metrics, you may want to check out InvestingPro's premium offering, which includes an additional 16 tips for Plaza Wires and other companies.
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