Bansal Wire Shares Surge 33% Post Strong Listing: Buy, Sell, or Hold?

Bansal Wire Shares: Following robust demand during its initial public offering (IPO), Bansal Wire Industries’ shares debuted on both the BSE and NSE with substantial premiums on Wednesday, July 10, despite a subdued market environment.

On the BSE, Bansal Wire share price opened with a 37.52% premium at ₹352.05 per share, while on the NSE, it started at ₹356 apiece, reflecting a premium of 39.06% over the issue price of ₹256.

Despite trimming some gains, the stock traded 33.40% higher at ₹341.50 on the BSE around 10:50 am. Meanwhile, the equity benchmark Sensex was down by 1% at 79,560 during that period.

Bansal Wire Industries, a stainless-steel wire manufacturer, successfully raised ₹745 crore from its book-built issue. The IPO consisted entirely of a fresh issue of 2.91 crore equity shares, priced in the range of ₹243 to ₹256 per share.

The Bansal Wire IPO opened for subscription on July 3 and closed on July 5, witnessing robust demand with a subscription of 59.57 times. The IPO received bids for 127.85 crore equity shares against the offer size of 2.14 crore shares.

In the Bansal Wire IPO, the retail category was oversubscribed by 13.64 times. Non-institutional investors (NII) subscribed to 51.46% of their allotted shares, while qualified institutional buyers (QIBs) subscribed by an impressive 146.05 times.

What Should Investors Consider Now?

While experts foresee long-term growth potential for the company, they caution that current valuations appear stretched. Investors might contemplate booking profits for short-term gains, though those with a longer investment horizon could opt to maintain their positions.

Shivani Nyati, head of wealth at Swastika Investmart, highlighted that Bansal Wire shares exceeded expectations upon their listing, marking a strong debut on the stock exchanges.

Nyati Suggests Holding Positions Despite Competitive Market Landscape

According to Nyati, Bansal Wire’s strong subscription indicates substantial investor confidence in its established market position, diverse product portfolio, and consistent financial performance. However, she acknowledges the challenges of operating in a fragmented and competitive market.

“Bansal Wire’s listing has exceeded initial expectations, demonstrating investor confidence in its prospects. Nevertheless, it’s important for investors to weigh these risks carefully,” Nyati emphasized. She recommended maintaining positions with a stop loss set at ₹321.

The metal wire industry presents a highly competitive and fragmented market for the company. Following its listing, we advise investors to consider booking profits,” stated Amit Goel, Co-Founder & Chief Global Strategist at Pace 360.

Prashanth Tapse, a research analyst and senior VP of research at Mehta Equities, noted that the Bansal Wire listing met his expectations, considering the strong demand from all investor categories.

Tapse believes that current valuations are stretched, suggesting that investors may consider booking profits following a strong debut.

“With the stock trading over 38% above the issue price post-listing, it presents a good opportunity for allocated investors to take profits as anticipated. Post-listing, we see stretched valuations, potentially limiting further upside,” Tapse remarked.

Despite industry challenges, Tapse highlighted management’s confidence in achieving multi-segmental growth and sustaining historical trends of 18% CAGR in revenue. He noted potential for further growth through business consolidations in the coming year.

Parth Shah, a research analyst at StoxBox, commented on the company’s fair valuation and recommended holding shares for medium to long-term gains.

Shah expressed optimism about Bansal Wire’s growth prospects, citing strong customer diversification and a broad product portfolio to mitigate revenue risks. He emphasized the company’s strategic plans to establish India’s largest steel wire manufacturing plant and expand into new markets in the southern and eastern regions, capitalizing on increased steel consumption driven by infrastructure growth.

Is Bansal Wire IPO a Good Investment?

The Bansal Wire IPO saw an impressive subscription rate of 59.57 times, indicating robust investor confidence. Priced at Rs 256 per share, the stock was anticipated to debut with a premium of about 30%, potentially listing around Rs 330-340 per share.