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Plaza Wires IPO Live, Proceeds to Fund Greenfield Manufacturing Unit

Plaza Wires logo

Plaza Wires Ltd., a Delhi-based manufacturer of cables, has rolled out its Initial Public Offering (IPO). The IPO, which is a book-built fresh issue of Rs. 71.28 crore, had been thrown open on 29th September 2023, and shall remain open till 4th October 2023.

About Plaza Wires Ltd.: Product Portfolio, Financial Performance

Plaza Wires’ Product Range: Cables, FMEG, Solar-based Appliances & More

WIres winding

Plaza Wires Ltd.’s portfolio spans categories such as PVC insulated LT Power and Control Cables, XLPE Insulated Power Cables, Aerial Bunched Cables and Medium Voltage XLPE Insulated Cables, Railway Signaling Cables and Mining Cables. Apart from this, the company manufactures Fast Moving Electrical Goods (FMEG). The company also manufactures solar lighting systems and solar water heaters.

Under its sub-brand PCG, Plaza Wires offers MCBs, PVC conduit pipes and PVC tape.

Plaza Wires’ Financial Performance for FY-23, Manufacturing Facility & Network

Plaza Wires had clocked Rs. 182.50 crore revenue from operations during the 2022-23 financial year, and the Profit After Tax (PAT) of the company stood at Rs. 7.51 crore for FY-23.

Plaza Wires has a manufacturing facility in Baddi, Himachal Pradesh. The company has over 100 channel partners and over 7 branch offices in India.

Specifics of the Plaza Wires IPO

Fresh Issue of 1.32 Crore Shares

Plaza Wires is offering 1.32 crore freshly issued shares in this IPO. Allotment for this IPO is expected to be finalised by 10th October 2023, post which the stock will be listed on NSE and BSE. Tentative date of listing on the stock exchanges is 13th October 2023.

Shares Offered in Rs. 51-54 Price Band

Plaza Wires’ shares have been offered at a ceiling price of Rs. 54 and a base price of Rs. 51. The company’s shares have a face value of Rs. 10 per share. Lot size has been specified as 277 shares, which translates to a minimum investment of Rs. 14,958 for willing investors.

Out of the total offered shares, 28.06% of the shares are reserved for anchor investors, 46.94% of the shares are open for Qualified Institutional Buyers (QIBs), and 15% shares are open to High Net-Worth Individuals (HNIs). The remaining 10% shares have been thrown open to retail investors.

Plaza Wires has two anchor investors for this IPO, namely Chanakya Opportunities Fund I and Astome Capital UCC-ARVEN, each of which have invested about Rs. 10 crore each to purchase 18,52,022 shares each at Rs. 54 per share.

IPO Proceeds to Fund Expansion, Meet Working Capital Requirements & Corporate Expenses

Plaza Wires’ Red Herring Prospect (RHP) for its IPO specifies that the net proceeds from this IPO will be used towards capacity expansion, the company’s working capital requirement, and general corporate expenses.

Out of the total IPO proceeds, Plaza Wires will be investing about Rs. 22.41 crore for setting up a greenfield manufacturing unit. This investment will be made partly in FY-24 and partly in FY-25. In the current fiscal, Plaza Wires will invest Rs. 18.51 crore in this facility, while the remaining Rs. 5.90 crore will be invested during FY-25. This upcoming unit will produce house wires, fire-resistant wires & cables, solar cables, and aluminum cables. As of now, the company has already invested Rs. 2.77 crore in this unit.

Apart from this, the company will utilise Rs. 22 crore to meet its working capital requirements, out of which Rs. 4 crore will be spent in FY-24 while Rs. 18 crore will be spent in FY-25.

Further, Plaza Wires will be utilising an amount not exceeding 25% of the gross proceeds of the IPO towards its general corporate expenses.

Plaza Wires IPO Booked & Subscribed 11 Times on Day 2 of IPO

As of 3rd October 2023, which is day 2 of the Plaza Wires IPO, the issue has been booked and subscribed 11 times. The component of the issue open to retail investors has been subscribed 52.9 times as per a report published on 3rd October 2023 by Mint. The component reserved for QIBs had been subscribed 31% as of day 2 of the Plaza Wires IPO.