Excellent Wires and Packaging Ltd. is a renowned manufacturer specializing in high-quality wire products and packaging solutions, known for offering a diverse portfolio that includes Mild Steel Wires, Spring Steel Wires, Galvanized Wires (GI Wires), Stainless Steel Wire, Brass Wires, Copper Wires, and Wire Ropes. These products are widely used across industries due to their strength, durability, and versatility, especially those crafted from premium-grade high carbon or stainless steel wire, often coated with PVC for added resilience.

The company is preparing for its Initial Public Offering (IPO), with a fixed price issue amounting to ₹12.6 Crores. The IPO is entirely a Fresh Issue of 14.00 lakh shares and is available for subscription from September 11, 2024, to September 13, 2024. The allotment is expected to be finalized around September 17, 2024, and shares are likely to be listed on the NSE SME platform by September 19, 2024.

The share price for this IPO is set at ₹90 per equity share, with a minimum lot size of 1,600 shares, translating to an investment of ₹144,000 for retail investors. For High-Net-Worth Individuals (HNIs), the minimum investment is two lots, amounting to ₹288,000.

Inventure Merchant Banker Services Private Limited is the book-running lead manager, and Bigshare Services Private Limited serves as the registrar. Inventure Growth & Securities Limited will act as the market maker for this IPO.

Grey Market Premium (GMP) and Subscription Status

The Grey Market Premium (GMP) for Excellent Wires and Packaging Ltd. IPO is currently estimated between ₹5 to ₹10, indicating potential listing gains of 5% - 10%. While GMP provides a general indication of demand, investors should consider this cautiously, as real price discovery happens post-listing.

As of 03:37 PM on September 12, 2024, the IPO has been subscribed 2.64 times on its second day of the subscription period, showing positive investor interest. For real-time updates, investors can check the live subscription status on NSE.

IPO Allotment and How to Check

The allotment date for the Excellent Wires and Packaging IPO is expected to be September 17, 2024. Investors can verify their allotment status by visiting the registrar’s website. Follow these steps:

Navigate to the IPO allotment status page.

Select Excellent Wires and Packaging Ltd. IPO from the dropdown list.

Enter your application number, PAN, or DP Client ID.

Submit the details to check your allotment status.

Objectives of the IPO

The funds raised through this IPO will be allocated toward:

₹578.18 Lakhs for the acquisition of land and construction of buildings.

₹200.00 Lakhs for the purchase of plant and machinery.

₹150.00 Lakhs for additional working capital.

₹231.82 Lakhs for general corporate purposes.

Financial Performance and Valuation

Financially, Excellent Wires and Packaging has shown promising growth:

Revenue increased from ₹728.85 Lakhs in FY22 to ₹1,540.82 Lakhs in FY24.

EBITDA rose from ₹16.52 Lakhs in FY22 to ₹146.14 Lakhs in FY24.

Profit After Tax (PAT) grew from ₹4.73 Lakhs in FY22 to ₹82.98 Lakhs in FY24, reflecting the company's steady financial performance.

The company’s pre-issue EPS stands at ₹3.32, while the post-issue EPS is ₹1.85. The pre-issue P/E ratio is 27.10x, and the post-issue P/E ratio is 48.64x, compared to an industry P/E ratio of 54.65x. The Return on Equity (ROE) for FY24 is 20.90%, suggesting the IPO is reasonably priced.

Investment Recommendation

Based on the GMP and the company’s financial trajectory, the Excellent Wires and Packaging IPO presents limited listing gain potential, with GMP suggesting 5%-10% gains. Given the valuation metrics and the relatively higher post-issue P/E ratio, we recommend avoiding this IPO for listing gains. However, long-term investors should evaluate the company's growth strategies and industry positioning before committing.

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