Plaza Wires Limited: A remarkable 130% rally in a weak market, do you own it?

Today, the broader indices, NSE Nifty50 and BSE Sensex, are trading in the red. The Nifty50 index opened the day at 19,027, which is 95 points below the previous day’s closing level of 19,122. During the intraday session, it reached an intraday high of 19,041 and a low of 18,849. Currently, it is trading at 18,865, a decrease of 255.65 points from the previous day’s closing level. On the other hand, the BSE Sensex is trading at 63,213, which is 835 points down from its previous day’s closing level.

In this weak market where most stocks are trading in the red, Plaza Wires Limited, a newly listed SME IPO, is outshining by trading 5% higher than the previous day’s closing price.

Today, the company’s shares opened at Rs 124.42 per share on the BSE, hitting intraday highs and lows of Rs 124.42 and Rs 120, respectively. As of writing this article, it is trading at Rs 124.42 per share, not only reaching its 52-week high price but also being locked in at the upper circuit limit of 5%, with no sellers available in the market. Furthermore, the stock has been hitting the upper circuit since listing day.

The current market capitalization of the company stands at Rs 544 crore, and the stock has generated an impressive return of 55% within two weeks.

IPO History: 

The stock made its debut on October 12, 2023, with a stellar premium of 55.56% on the BSE, at Rs 84 per share compared to its issue price of Rs 54 per share. On the final day of the IPO window, it witnessed a subscription rate of 161 times. The public issue received an overwhelming response, with the retail category being oversubscribed by 375 times, the QIB category achieving a subscription rate of 43 times, and the NII category reaching a subscription rate of 388 times.

The IPO price range was set between Rs 51 to Rs 54, with a face value of Rs 10 per share and a lot size of 277 shares. The total size of the company’s IPO was Rs 71.28 crore, and the final share issue price was fixed at Rs 54 each. Based on the listing price, the stock has generated a 130% return within just 15 days of listing.

Business Overview: 

Plaza Wires Limited operates in the wire manufacturing industry, where it engages in the production and distribution of wires. Additionally, the company markets LT aluminum cables and fast-moving electrical goods (FMEG) under its flagship brand, “PLAZA CABLES,” as well as its home brands, “Action Wires” and “PCG.”

Originally established as Navratna Wires, Plaza Wires primarily focuses on various products in the wires and cables sector. Their product portfolio includes house wires, single and multicore round flexible industrial cables, and industrial cables designed for submersible pumps and motors with a voltage rating of up to 1.1kV. The company also extends its offerings to include other wire and cable products, such as LT power control cables, co-axial cables for TV dish antennas, industrial cables for telephones and switchboards, cables for computer and LAN networking, closed-circuit television cables, solar cables, PVC-insulated tape, as well as PVC conduit pipes and related accessories, all of which are sourced from third-party manufacturers.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.