In the dynamic world of financial markets, the Plaza Wires Initial Public Offering (IPO) has created quite a stir. With the IPO being subscribed 3.39 times on the very first day, and the retail portion being oversubscribed by a whopping 20.06 times, it’s clear that investors are eager to be a part of this opportunity.
In this article, we’ll delve into all the crucial details surrounding about the IPO and what makes it such an attractive investment.
A Glimpse into Plaza Wires IPO
Plaza Wires IPO Opens for Subscription
On Friday, September 29, IPO opened its doors to investors, offering a range of wires, cables, and electrical goods under various well-known brands.
The company’s primary objective behind this fundraising endeavor is to fuel its expansion and bolster its working capital. The IPO is priced in the range of ₹51 to ₹54 per share, making it accessible to a wide spectrum of investors.
Subscription Status on Day 1
The response to Plaza Wires IPO has been overwhelming. On the very first day, the IPO was subscribed 3.39 times, reflecting the confidence investors have in the company’s prospects. The breakdown of subscriptions reveals that retail investors have shown immense interest, with their portion being oversubscribed by a staggering 20.06 times.
Non-Institutional Investors (NII) also displayed enthusiasm, with a subscription rate of 2.86 times. Meanwhile, Qualified Institutional Buyers (QIB) are yet to make their bids.
In-Depth Subscription Status
As of 15:09 IST on the opening day, The Company IPO received bids for a total of 3,21,50,559 shares, against the offering of 94,96,114 shares, indicating the strong appetite among the investors.
The retail investors’ portion saw bids for 2,64,82,585 shares against the available 13,20,015 shares. Non-institutional investors bid for 56,60,218 shares against the 19,80,023 shares allotted to this segment. As mentioned earlier, the QIB portion is still awaiting bids.
Plaza Wires IPO in Detail
Utilization of Funds
Plaza Wires IPO, valued at ₹71.28 crores, comprises solely a fresh issue of 13,200,158 equity shares, with no offer for sale (OFS) component. The company has earmarked the net proceeds from this offering for various purposes, including funding the capital expense required for establishing a new manufacturing facility.
This facility will cater to the production of house wires, fire-resistant wires and cables, aluminum cables, and solar cables, thus diversifying the company’s product portfolio. Additionally, the funds will be allocated to meet the company’s working capital requirements and other corporate needs.
Plaza Wires’ aggregate revenue from operations for fiscal years 2023, 2022, and 2021 was 1,382.27 million, 1,388.28 million, and 1,180.55 million, respectively, according to the Red Herring Prospectus (RHP). This illustrates the company’s steady revenue increase over time.
Pantomath Capital Advisors Pvt Ltd is the book-running lead manager for Plaza Wires IPO, while Kfin Technologies Limited serves as the issue’s registrar.
Grey Market Premium (GMP)
The grey market premium (GMP) for Plaza Wires IPO currently stands at +12, indicating that Plaza Wires shares are trading at a premium of ₹12 in the grey market as of Friday.
Considering this, the estimated listing price for Plaza Wires shares is ₹66 apiece, representing a 22.22% increase over the IPO price of ₹54. The GMP reflects investors’ willingness to pay a premium for these shares.
Final Thoughts on Plaza Wires IPO
In summary, Plaza Wires IPO has garnered substantial interest from investors, with its impressive subscription numbers and positive GMP. The company, known for manufacturing, marketing, and selling wires, LT aluminium cables, and fast-moving electrical goods under various household brands, has experienced steady growth in its revenue. However, it operates in a competitive market with established players.
As you contemplate investing in this IPO, it’s essential to weigh the company’s growth potential against the competitive landscape. While the IPO may appear fully priced based on its FY23 earnings, investors looking for medium to long-term rewards may find this opportunity worth exploring. The Plaza Wires IPO is open for subscription until Wednesday, October 4, giving investors ample time to make informed decisions and be a part of this exciting venture.
So, whether you’re a seasoned investor or someone looking to dip their toes into the stock market, Plaza Wires IPO presents a compelling opportunity to consider. Keep an eye on the latest developments and make your investment decision wisely.