Bansal Wire share price falls marginally post robust listing. Should you hold or exit?

Analysts noted that the company boasts strong customer diversification to mitigate revenue impact and a diversified product portfolio effectively serving various sectors with distinct needs.

The demand for wires is mainly driven by its major end-user industries, such as automotive, construction, power, and agriculture, with infrastructure holding the highest demand for wires. The increase in steel consumption across infrastructure, automobile, and housing sectors can also be seen with the positive economic trends domestically.

"Owing to such growth, steel manufacturers are expected to benefit directly from this growth. To follow up with the growing trends, the company plans to set up a new manufacturing unit, the largest steel wire manufacturing plant in India. The company also aims to expand its reach to other regions, i.e. south and east, to garner additional market share. On the financial front, the issue is fairly valued. Hence, we advise the market participants to hold the shares from a medium to long-term perspective," said Parth Shah, Research Analyst, StoxBox.

"Overall, Bansal Wire's listing performance surpasses pre-listing expectations and signifies investor confidence in the company's potential. However, careful consideration of the identified risks is still crucial. Investors are advised to hold their position with a stop-loss of Rs 321," said Shivani Nyati, Head of Wealth, Swastika Investmart.

The company proposes to use the funds from the IPO to repay some of its debt, working capital requirements, and other general corporate purposes.

Over the years, the company has adopted a de-risking strategy, under which no single customer accounts for more than 5% of its sales, and no sector or segment constitutes more than 25% of the sales.

The total income has increased at a CAGR of 28% from Rs 1,480 crore in FY21 to Rs 2,422 crore in FY23. EBITDA during the same period grew at a rate of 16% to Rs 1,15 crore, while PAT has increased at 21.6% to Rs 59.9 crore.

SBI Capital Markets and DAM Capital were acting as the book-running lead managers for the IPO.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)