Delhi-based Plaza Wires Limited, engaged in the business of manufacturing, marketing and selling of wires, aluminium cables and fast moving electrical goods (“FMEG”) has filed its Draft Red Herring Prospectus (“DRHP”) dated April 30, 2022 with the markets regulator, Securities and Exchange Board of India on May 1, 2022, to raise funds through an initial public offering with a fresh issue of 1,64,52,000 equity shares.
The issue has a face value of Rs 10 per equity share for the proposed share sale. The Issue is being made through the Book Building Process, wherein not less than 75 percent of the Issue shall be available for allocation to Qualified Institutional Buyers, not more than 15 percent of the Issue shall be available for allocation to Non-Institutional Bidders and not more than 10% of the Issue shall be available for allocation to Retail Individual Bidders.
The proceeds from its fresh issuance will be used towards capital expenditure for setting up of a new manufacturing unit and, working capital requirements of the Company including general corporate purposes.
The Company's product mix includes various types of wires and cables, as well as FMEG such as electric fans, water heaters, switches and switchgears, PVC insulated electrical tape, and PVC conduit pipe and accessories.
In 2021, the Company launched a line of house wires under the brand "Action Wires" for products in the economical price-range. According to the Resurgent India Research Report quoted in its DRHP, it is one of the fastest growing manufacturers in the wires and cables industry in northern region in India, and provides extensive range of wires and cables, under its flagship brand “PLAZA CABLES” and home brands such as “Action Wires” and “PCG”.
The Company’s business model engages dealer and distribution network via 1108 authorised dealers and distributers to sell and market the Company's products, including sales through C&F agents, and direct sales to infrastructure projects. The competitors of the Company include Finolex Cables Limited, KEI Industries Limited, Havells India Limited, KEC International Limited, R R Kabel Limited, V-Guard Industries Limited, and Polycab India Limited.
It's manufacturing facility at Baddi has an installed production capacity of 12,00,000 coils of standard size per annum. It has proposed to set up a manufacturing facility to add 8,37,000 coils per annum to manufacture new products such as fire-proof/survival wires, LT aluminium cables and solar cables.
Profit for the 9-month period ended on December 31, 2021 stood at Rs 57.44 million on revenue of Rs 1266.93 million. The Company clocked a profit of Rs 43.72 million in the financial year FY21, whereas revenue from operations stood at Rs 1453.78 million in fiscal 2021.
In India, the wire and cables industry has grown at a CAGR of approx. 13.68 percent in the last 5 years and in FY-21 was valued at Rs 78800 cr. The C&W industry is expected to grow to Rs 1,033 billion in FY23, boosted by increased infra spends by the government. Demand for building wires and power cables would be spurred by government schemes such as Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya scheme) and Power for All, focusing on electrification of rural households and T&D efficiencies, as well as an increase in cabling demand from commercial establishments and public utilities.
Pantomath Capital Advisors Private Limited is the sole Book Running Lead Manager to the Issue and Kfin Technologies Limited is the Registrar to the Issue.
The equity shares are proposed to be listed on BSE and NSE.
