Bharat Wire Ropes issue to open on March 18; sets IPO price band at Rs 40-45

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Bharat Wire Ropes issue to open on March 18; sets IPO price band at Rs 40-45

Bharat Wire Ropes (BWR) one of the leading speciality wire ropes manufacturing company in India is set to go public. The issue is to raise Rs 70 crores from the market which will open on March 18, 2016 and closes on March 22, 2016. Intensive Fiscal Services Private Limited and BOB Capital Markets Limited are the Book Running Lead Managers while Karvy Computershare Private Limited is the registrar of the Issue. The equity shares of the company are proposed to be listed on the BSE and the NSE.

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Issue Snapshot

Manufacturer of wire ropes is planning to raise funds through fresh issue of shares of up to 700 million equity shares by promoters. The price band for the offer is at Rs 40 to Rs 45 per equity share of face value of Rs 10 each. Since the new issue size is less than Rs 500 crore, the company is not subject to monitoring by any independent agency under SEBI regulations. The book running lead managers for this offer are Bank of Baroda and Intensive Fiscal Services.

The Issue is being made through the Book Building Process wherein at least 75% of the Net Issue will be allotted on a proportionate basis to Qualified Institutional Buyers (“QIBs”). Out of which 5% of the QIB Portion will be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion will be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Issue Price.

Further, not more than 15% of the Net Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and not more than 10% of the Net Issue will be available for allocation to Retail Individual Bidders and 5% of the Issue size aggregating upto Rs 350 lacs is reserved for subscription by eligible employees, in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Issue Price.

Company Profile

The company was originally promoted by the Shah Group and in the year 2010, equity shares were purchased by one of the current promoters – Gaji Mercantile Private Limited under SPA dated June 30, 2010. BWR are a wire rope and wires manufacturing company established in the year 1986. Company is engaged in manufacturing and sales of wire ropes, structural strands, slings and wires which find its application in general engineering, fishing, elevators, cranes, material handling, power transmission, suspension bridges, onshore / offshore oil exploration, ports and shipping, mining, defence, railways etc. BWR is also engaged in the business of trading of the steel related products. Company has a steel wire ropes manufacturing facility with an installed capacity of 12,000 MTPA, which is located at Atgaon. Company’s products are utilized in various parts of the country. BWR’s presence in the global market has been rapidly increasing to include countries such as USA, Germany, Spain, Qatar, Egypt, UAE, South Africa, Australia, Nepal, Uganda, Singapore, Mauritius and Oman.

Utilization of IPO Funds

According to the BWR’s DRHP (Draft Red Herring Prospectus), BWR intends to use the IPO proceeds primarily for setting up of proposed project of 66,000 MTPA wire ropes at Chalisgaon, Maharashtra. Further, part of the proceeds would also be used for general corporate purpose and issue related expenses.

Financials

As per restated financials, BWR’s total revenue for financial year 2012, financial year 2013 and financial year 2014 was Rs 77.2 crore, Rs. 74.3 crore and Rs. 82.2 crore, respectively. Companies EBITDA for financial year 2012, 2013 and 2014 was Rs 8.81 crore, Rs 9.24 crore and Rs. 8.97 crore, respectively. BWR PAT for financial year 2012, 2013 and 2014 was Rs 2.14 crore, Rs 1.47 crore and Rs 1.50 crore respectively.

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