Plaza Wires subscribed 3.47x on Day 1; retail portion booked over 20.6 times

The Rs 71.28 crore-initial public offering (IPO) of Plaza Wires saw a strong response from the investors during the first day of the bidding process, particularly by retail and non-institutional investors (NIIs). The issue had kicked-off for bidding on Friday, September 29.

The New Delhi-based Plaza Wires is selling its shares in the price band of Rs 51-54 apiece with a lot size of 277 shares and its multiples thereafter. The three-day bidding for the IPO will close for bidding on Wednesday, October 4. The entire block of Rs 71.28 crore is entirely a fresh sale of 13,200,158 crore equity shares.

According to the data, the investors made bids for 3,29,49,150 equity shares, or 3.47 times, compared to the 94,96,114 equity shares offered for the subscription by 3.25 pm on Friday, September 29. The four-day bidding for the issue will conclude on Thursday, October 5.

The allocation for retail investors was subscribed 20.6 times, while the portion reserved for non-institutional investors saw a subscription of 2.91 times. However, the quota set aside for qualified institutional bidders (QIBs) was yet to attract any bids as of the same time.

Plaza Wires, which was incorporated in 2006, manufactures and sells wires and cables. The company sells and markets LT aluminium cables and fast-moving electrical goods (FMEG) and home brands. Plaza Cables has a network of more than 1,249 authorised dealers and distributors.

It has three branch offices each in Rajasthan, Uttarakhand, and Uttar Pradesh; one branch office in Maharashtra, four warehouses in Uttar Pradesh, Assam, Kerala and Delhi. Plaza Cables clocked a net profit of Rs 7.51 crore with a revenue of Rs 182.60 crore in the financial year 2022-23.

"The issue is valued at a P/E of 22 times based on FY2023 earnings which prices in most of the positives of the company. It is important to note that Plaza Wires operates in an industry which has high raw material volatility. The business operates in a highly competitive industry with multiple big players which can challenge the pricing power," said StoxBox with an 'avoid' rating.


Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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