Plaza Wires IPO, raising Rs 71.28 crores, consisted solely of a fresh issue of 1.32 crore shares. The bidding period for Plaza Wires IPO spanned from September 29, 2023, to October 5, 2023, with allotment finalized on Monday, October 9, 2023.

Following this, the shares debuted on both BSE and NSE on October 12, 2023. The IPO price band was set at ₹51 to ₹54 per share, with a minimum lot size for application comprising 277 shares. Retail investors were required to invest a minimum of ₹14,958. Additionally, for sNII, the minimum lot size investment equated to 14 lots (3,878 shares), amounting to ₹209,412, while for bNII, it was 67 lots (18,559 shares), totaling ₹1,002,186.

Pantomath Capital Advisors Pvt Ltd served as the book running lead manager for the Plaza Wires IPO, with Kfin Technologies Limited acting as the registrar for the issue.

OBJECTIVE OF IPO

1. Funding the capital expenditure towards setting up of a new manufacturing unit for house wires, fire-resistant wires & cables, aluminum cables and solar cables to expand our product portfolio.

2. Funding the working capital requirements of our Company.

3. General corporate purposes.

Additionally, company believes that listing of equity share of the company in the stock exchange will increase the brand image and corporate value of the company.

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About Plaza Wires Limited

An ISO 9001:2015 and 14001:2015 certified company engaged in the business of manufacturing and selling of wires and selling and marketing of LT aluminum cables and fastmoving electrical goods (“FMEG”) under the flagship brand “PLAZA CABLES” and home brands such as “Action Wires” and “PCG”.

The company has a product mix comprising of different types of wires and cables, and FMEG such as electric fans, water heaters, switches and switchgears, PVC insulated electrical tape and PVC conduit pipe & accessories. In 2021, company expanded their product portfolio by launching miniature circuit breakers and distribution board (DB) in the north and south India region.

Business model includes: -

1) Dealer & distribution network to sell and promote products, 130 including sales through C&F agents. A company selects its dealers & distributors based on their sales network, market reputation and financial strength including sales.

2) Securing government tenders for supply to government projects

3) Direct sales to infrastructure projects.

The company have over 1249 authorized dealers and distributors pan India and C & F agent in1 states, viz. Punjab for the period ended on March 31, 2023. It supply its products across various states, mainly in the states of Delhi, Uttar Pradesh, Haryana, Kerala, Rajasthan.

The global wire and cable market was valued at $191.6 billion in 2022 and is expected to reach $351.3 billion by 2032 and is poised to grow at a compound annual growth rate (CAGR) of 6.30% during the forecast period 2023 to 2032.

The wires and cables (C&W) industry in India is poised for significant growth, projected to reach ₹1,033 billion in FY23, primarily driven by a surge in government infrastructure investments. This upswing will particularly benefit building wires and power cables, spurred by initiatives like the Saubhagya scheme and Power for All, focused on rural electrification and transmission and distribution efficiency enhancements. Additionally, the escalating demand from commercial entities and public utilities will further fuel this expansion.

The burgeoning renewable energy sector, particularly the surge in solar and windmill capacities, will propel the need for specialized cables such as solar and elastomeric cables. Moreover, in Tier I cities where space constraints and heightened demand from projects like metro systems prevail, the demand for Extra High Voltage (EHV) underground cables is on the rise.

Despite its cyclical nature, the industry has demonstrated robust growth, with a compound annual growth rate (CAGR) of approximately 13.68% over the last five years, reaching ₹788.00 billion in Fiscal 2021. Looking ahead, Resurgent India Limited anticipates a sustained upward trajectory, forecasting a CAGR of about 14.50% in value terms, propelling the industry to an estimated ₹1550.00 billion by Fiscal 2026.

RISK FACTORS

• The company has not entered into any long-term agreements with any of its raw material or inputs suppliers and it purchase such raw materials and inputs on spot order basis. Any failure of its suppliers to deliver these raw materials in the necessary quantities would impact on the company’s operations.
• The company is dependent on the sale of Wires and Cables products. An inability to anticipate and adapt to evolving customer preferences may adversely impact demand for products, brand loyalty and financial performance.
• The company's parent, Plaza Cable Electric Pvt., is engaged in activities that are similar to its business. This may be a potential source of conflict of interest, which may have an adverse effect on its business.
• PWL generates 75.94% of sales from Delhi, Uttar Pradesh, Kerala, Uttrakhand, Haryana region. Any adverse developments affecting its operations in these regions could have an adverse impact on the company’s revenue and results of operations.
• The company’s existing and proposed manufacturing facilities are concentrated in a single region i.e., Himachal Pradesh. Any adverse development affecting continuing operations at its manufacturing facilities could result in significant loss due to an inability to meet customer contracts and production schedules.
• The company's success depends on its ability to build the proposed manufacturing unit and expand its product portfolio, both of which are subject to risks and uncertainties.
• Inadequate or interrupted supply and price fluctuations of raw materials and packaging materials could adversely affect business. Inventories hold majority of the cost. And the company relies on third party manufacturers for manufacturing some parts.
• The industry segments in which companies operate are fragmented, and they face competition from large players, which may affect their business operations and financial conditions.
• Company is subject to strict quality requirements and any product defect issues or failure or raw material suppliers to comply with quality standards may lead to the cancellation of existing and future orders, recalls and exposure to potential product liability claims.
• Lenders have to charge over movable and immovable properties in respect of finance availed.
• Business is dependent on the performance of the real estate, infrastructure and other related industries where the products are utilized. Uncertainty regarding the real estate market, infrastructure sector, economic conditions and other factors beyond control could adversely affect demand.