Plaza Wires Limited is engaged in the business of manufacturing and selling wires, and selling and marketing LT aluminum cables and fastmoving electrical goods (“FMEG”) under its flagship brand “PLAZA CABLES” and home brands such as “Action Wires” and “PCG”. Its product mix comprises different type of wires and cables, and FMEG such as electric fans, water heaters, switches and switchgear, PVC insulated electrical tape, and PVC conduit pipe & and accessories.
OBJECTS OF THE ISSUE
- Funding capital expenditure requirements of the Company. Funding the working capital requirements of the company.
- General corporate purposes.
Mr. Sanjay Gupta
Managing Director and one of the Promoters of the Company. He has been on the Board of Directors of the Company since March 12, 2008 and was appointed as the Managing Director and Chairman of the Company since March 10, 2022. He possesses approximately 26 years of experience in the electrical industry.
Mrs. Sonia Gupta
Whole-time Director and one of the Promoters of the Company. She has been on the Board of Director of the Company since March 21, 2008. She has approximately 26 years of work experience in the electrical industry. She has been instrumental in planning and formulating the overall business and commercial strategy and managing the financial planning of the Company.
Mr. Ajay Kumar Batla
Chief Financial Officer of the Company. He joined the Company on April 1, 2009. He has been appointed as CFO of the Company with effect from March 10, 2022. He participates in the key decisions of the Company and inter-alia develops financial and tax strategies and monitors budgeting of the Company.
Ms. Bhavika Kapil
Company Secretary and Compliance Officer of the Company. She was appointed as the Company Secretary and Compliance Officer of the Company with effect from March 10, 2022. She is responsible for handling secretarial compliances in the Company. She has a work experience of approximately 3.5 years as she was appointed in Fiscal 2022.
COMPANY PROFILE
- Plaza Wires Limited’s key products in the wires and cables segment include house wires, single & and multicore round flexible industrial cables, and industrial cables for submersible pumps & and motors up to 1.1kv grade.
- The company also provides other wires and cable products such as LT power control cables, TV dish antenna co-axial cables, telephone & and switchboard industrial cables, computer & LAN networking cables, close circuit television cables and solar cables, PVC insulated tape, and PVC conduit pipe & accessories, through third-party manufacturers.
- The Company sells its products through a variety of distribution channels depending on the geography and industry norms and trends. Its business model includes 1) Its dealer & and distribution network. 2) Securing government tenders, and 3) Direct sales to infrastructure projects
- The existing Manufacturing Unit is located at Baddi, Himachal Pradesh with an installed production capacity of 12,00,000 coils per annum.
COMPETITIVE STRENGTHS
- Product portfolio focused on various customer segments and markets. Distribution network.
- Management and dedicated employee base. Strategically located Manufacturing Facility.
KEY STRATEGIES
- Setting up the Proposed Manufacturing Unit to widen its product portfolio and increase its capacity. Enhance its position in the Wires and Cables Industry.
- Expand its dealer network in existing markets and enter new geographical markets. Strengthen its brand value.
- To use technology to further optimize its sales & and marketing operations.
KEY CONCERNS
- Inadequate or interrupted supply and price fluctuation of its raw materials and packaging materials could adversely affect its business.
- The company requires significant amounts of working capital.
- Its existing and proposed manufacturing facilities are concentrated in a single region.
- The industry segments in which it operates are fragmented, and it face competition from large players.
- It relies on certain third-party manufacturers for manufacturing some of its products.
- Pricing pressure from dealers and distributors may affect its gross margins and ability to increase its prices.
- The Company does not have any long-term or definitive agreements with its dealers or customers.
COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2023)
FINANCIALS (RESTATED CONSOLIDATED)
OUTLOOK & VALUATION
Plaza Wires operates in the wires and cables segment, and it also offers fast-moving electrical goods. The company is focused on various customer segments and has a large distribution network. Its financial performance has been stable.
However the company relies on certain third-party manufacturers for some of its products, and it also faces competition from large players in the industry. Also, it does not have any long-term contracts with its dealers and customers.
Though the IPO is coming at a fair P/E valuation of 21.95x, considering its small issue size, current market conditions, and other related risks, we will avoid this IPO.
DISCLAIMER:
The information contained herein are strictly confidential and are meant solely for the information of the recipient and shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written permission of Swastika Investmart Ltd. (“SIL”). The contents of this document are for information purpose only. This document is not an investment advice and must not alone be taken as the basis for an investment decision. Before taking any decision to invest, the recipient of this document must read carefully the Red Herring Prospectus (“RHP”) issued to know the details of IPO and various risks and uncertainties associated with the investment in the IPO of the Company. All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific investment objectives and financial position. They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and investment considerations arising from such investment. The investor should possess appropriate resources to analyze such investment and the suitability of such investment to such investor’s particular circumstances before making any decisions on the investment. The Investor shall be solely responsible for any action taken based on this document. SIL shall not be liable for any direct or indirect losses arising from the use of the information contained in this document and accept no responsibility for statements made otherwise issued or any other source of information received by the investor and the investor would be doing so at his/her/its own risk. The information contained in this document should not be construed as forecast or promise or guarantee or assurance of any kind. The investors are not being offered any assurance or guaranteed or fixed returns on their investments. The users of this document must bear in mind that past performances if any, are not indicative of future results. The actual returns on investment may be materially different than the past. Investments in Securities market products and instruments including in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low risk tolerance. Such Investments are subject to market risks including, without limitation, price, volatility and liquidity and capital risks. Therefore, the users of this document must carefully consider all the information given in the RHP including the risks factors before making any investment in the Equity Shares of the Company.
Swastika Investmart Ltd or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither Swastika Investmart Ltd nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. Swastika Investment Ltd may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the Subject Company or third party in connection with the Research Report.
CORPORATE & ADMINISTRATIVE OFFICE - 48, Jaora Compound, M.Y.H. Road, Indore - 452 001 | Phone 0731 - 6644000
Compliance Officer: Ms. Sheetal Duraphe Email: compliance@swastika.co.inPhone: (0731) 6644 241
Swastika Investmart Limited, SEBI Reg. No. : NSE/BSE/MSEI: INZ000192732 Merchant Banking: INM000012102 Investment Adviser: INA000009843 MCX/NCDEX: INZ000072532 CDSL/NSDL: IN-DP-115-2015 RBI Reg. No.: B-03-00174 IRDA Reg. No.: 713.
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