### 2. **Industry Overview**
The industry overview section provides insights into the market dynamics, growth drivers, challenges, and competitive landscape of the wire industry. Key points include:
- **Market Size and Growth**: India has been the second largest global steel producer since calendar year 2018. The steel wire industry has witnessed a significant growth at a CAGR of 6.90% over Fiscals 2019-23, growing to 5.6 million tonnes, primarily owing to increasing infrastructure development activities across the country and growing production in the automobile industry. Demand is expected to log 8-10% at the CAGR between Fiscals 2023 and 2028, growing to 8-9 million tonnes, due to increasing budget allocation of central and state governments for infrastructure development and expansion of the automobile industry. The wire industry in India is expected to grow at a significant rate due to increasing demand from the construction, automotive, and power sectors.
### 3. **Peer Group Comparison**
Largest Companies from this industry are Tata Wires with 4.2 Lakh Tones Production capacity. Large players in the 2nd line after Tata Wires are Viraj Wires with 8885 Cr turnover, Bansal Wires (IPO): 2970 Cr, Synergy with around 2110 Cr. Unlike the wire rods market, wire manufacturing is a highly fragmented market with over 100 players operating in the industry with top 10 manufacturers continuing to around 22% of the market with Tata Wires catering to highest ~7.5% of the demand. Systematic wires 2.5% and Bansal 2.0% market share. Other than Tata wires, the other key wire manufacturers have a market share in the range of 2-3%
From the listed space there are 3 Major Players
1) Rajratan Global Wire with 891 Cr revenue, 8% Profit margin & 0.4 Debt/Equity,
2) DP Wires with 1002 Cr revenue, 3.6% Profit margin & a debt free company,
3) Bedmutha Industries with 812 Cr revenue, 2.4% Profit margin & a 240 Cr debt on just 140 Cr Networth which is high risk.
4) IPO Company: Bansal Wire with 2466 Cr revenue which is largest among all, 2.4% Profit margin of 3.2% which is not so good & 681 Cr debt on just 422 Cr Networth which is again risk & not so much favourable.
Considering the above parameter we can say better is either Rajratan Global or DP Wires with better financials.
### 4. **Financial Analysis**
- **Income Statement**: Revenue is 2466 Cr & is growing with average profit margins with Bad ICR due to high debt.
- **Balance Sheet**: Debt is larger than networth which denotes bad financials. Trade receivable of 360 Cr on revenue of 2466 Cr is also high.
- **Cash Flow Statement**:There is a Negative cash flow of 537 Cr last year.
### 5. **Offer**
Details about the IPO offer include:
- **Fresh Issue**: Aggregating up to ₹ 745 Cr.
- **Offer for Sale**: Not applicable in this case.
- **Total Issue Size**: Up to ₹ 745 Cr.
### 6. **Object of the Offer**
The funds raised from the IPO will be used for:
- **Capital Expenditure**: Setting up new manufacturing facilities and upgrading existing ones.
- **Working Capital Requirements**: To support increased production and operational needs.
- **Debt Repayment**: Reducing existing debt to improve financial stability.
- **General Corporate Purposes**: As specified in the prospectus.
### 7. **Basis of the Offer**
The basis of the offer includes factors such as:
- **Marketshare**: Not the leader company but among the second leadership.
- **EPS**: EPS of 6.18 at the price of 256 gives the PE of 41 is high as this sector has low PE due to high capex and inconsistent profitability. .
- **RONW%**: Ronw is 18.27% which is good.
- **PBV**: At the Book value of 33.14 the price to BV goes to 256/33.14 = 7.7 which again is high.
### 8. **Future Outlook**
We may see 12% CAGR growth in the topiline in the coming year but high debt may give inconsistent profits.
### 9. **Threats & Challenges:**
- **Raw Material Price Volatility:** Fluctuations in prices of key raw materials like iron ore, iron ingot, wire rod, and associated production costs.
- **Regulation and Compliance:** Environmental regulations impacting production costs and operational compliance.
### 10. **Conclusion**
May see a jump on the IPO day only because the IPO size is small but not advisable for long term wealth. Rather Rajratna or DP wires are even better than this company.
Disclosure: Do not buy or sell before watching the data on your own.
