IPO listed on 12 Oct'23
Plaza Wires Ltd
Minimum Investment
₹ 14,958 / 277 shares
Grey market premium
₹ 12 (22% premium)
Issue price
₹ 54
Listing price
₹ 84
Listing gains
30 (56%)
Listing on
Oct 12, 2023
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- Plaza Wires exhibits a steady growth trajectory in terms of both its revenues and earnings, complemented by decent return ratios. Yet, the profitability margins remain on the lower side.
- At the top end of the price band, the issue is valued at a P/E multiple of 31x, which prices in most of the positives of the company. The grey market premium (GMP) for the issue, however, indicates a premium listing.
- Based on these factors, investors can consider participating in this IPO for listing gains. However, for those focused on long-term growth, it's advisable to observe the company's performance over the upcoming two quarters and assess its expansion plans before making any investment commitments. It's important to highlight that the company is part of a highly competitive sector with many big players, which might challenge the firm's pricing power.
About the company
Founded in
23 Aug'06
Managing director
Sanjay Gupta
- Plaza Wires specializes in the production and distribution of wires, and they also market low tension aluminium cables along with a range of fast-moving electrical goods (FMEG). Their products are prominently sold under the renowned ‘PLAZA CABLES’ brand, as well as other in-house brands like ‘Action Wires’ and ‘PCG’.
- Their state-of-the-art manufacturing facility situated in Baddi, Himachal Pradesh, has an installed capacity of 1,200,000 coils annually. Their product lineup includes electric fans, water heaters, switches, switchgears, PVC insulated tapes, and PVC conduit pipe accessories, among others.
STRENGTHS
- Impressive Financial Performance: From FY21 to FY23, Plaza Wires has shown consistent growth with a compounded annual growth rate (CAGR) of 12% in Revenue, 20% in EBITDA, and 33% in Net Profit.
- Enhanced Profitability: There has been a consistent rise in the EBITDA margin, increasing from 7.5% in FY21 to 8.6% in FY23. Additionally, the Net Profit margin has grown from 2.9% to 4.1% during this timeframe.
- Decent Return Metrics: There's a corresponding positive trend in return metrics. The Return on Equity climbed from 10.75% in FY21 to 14.15% in FY23, and the Return on Capital Employed rose from 11.62% to 15.57% over the same span.
RISK FACTORS
- High Working Capital Needs: The nature of their business demands significant capital, with a large chunk of the working capital tied up in trade receivables and inventories. Should the company need more financing to address these demands, any shortcomings in addressing these working capital requirements could negatively impact their operational outcomes and overall business.
- Moderate Profit Margins: Despite witnessing growth in profitability, the margins are still on the lower side, with the Net Profit margin standing at 4.1% in FY23.
- Dependency on Proposed Expansion: The company's success hinges on its capability to establish the proposed manufacturing unit and broaden its product range. Any delays in execution can expose the company to risks associated with both time and cost overruns, potentially harming the business's operational performance and financial health.
Issue details
Issue type
Mainstream
Issue size
₹ 71.28 crore
Fresh Issue
₹ 71.28 crore
OFS
₹ -
Price range
₹ 51 - 54
Lot size
277 shares
Issue Objective
Net proceeds from the issue will be utilised for:
- Funding the capex towards setting up a new manufacturing unit;
- Funding the working capital requirements of the company;
- General corporate purposes.
Dates
Bidding open
29 Sep'23
Bidding close
4 Oct'23
Allotment date
9 Oct'23
Refund date
10 Oct'23
Listing
12 Oct'23
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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