DCG Wires And Cables Limited IPO GMP, Review

DCG Wires and Cables Limited IPO Review: DCG Wire and Cables Limited is planning an IPO for ₹ 49.99 crores, consisting of a new issue of 49.99 lakh shares. The company intends to use the funds collected to cover capital expenditures for building construction and working capital.

DCG Wires And Cables Limited IPO – Company Profile

DCG Wires and Cables manufactures copper cables and wires. The primary concentration is on manufacturing various types of copper wires used in transformers. The product line includes copper strips, paper-covered copper strips and wires (Kraft/Crepe/Nomex/Mica), bare copper wires and strips, copper tapes, and fiber glass copper. The company provides a wide range of copper goods. The goods include bare copper strips, conductors, and wires that provide excellent conductivity for a variety of applications.

They also offer paper-covered copper conductors in rectangular and round shapes, as well as multi-paper copper conductors and transformer-specific connection cables. It provides fiberglass-covered copper strips and wires to increase longevity. Additionally, copper submersible cables and strips are ideal for submerged applications. The company also sells paper-covered copper strips in twin and triple bundles, as well as bunch conductors.

DCG Wires And Cables Limited IPO – Important Dates

DCG Wire and Cables IPO Date	April 8, 2024 to April 10, 2024
DCG Wire and Cables IPO Listing Date	April 16, 2024
DCG Wire and Cables IPO Price	INR 100 per share
DCG Wire and Cables IPO Lot Size	1200 Shares
DCG Wire and Cables IPO Total Issue Size	INR 49.99 crores
DCG Wire and Cables IPO Basis of Allotment	April 12, 2024
DCG Wire and Cables IPO Initiation of Refunds	April 15, 2024
DCG Wire and Cables IPO Credit of Shares to Demat	April 15, 2024
DCG Wire and Cables IPO Issue Type	Fixed Price Issue
DCG Wire and Cables IPO Listing At	NSE SME

DCG Wires And Cables Limited IPO – Financials

The financial data for a company preparing for an IPO shows great growth and increased performance. Revenue increased from ₹5,452.47 lakhs to ₹7,633.22 lakhs, resulting in strong equity, profitability, and EPS growth. This study shows a bright outlook, but investors should do a full market assessment before investing.

Revenue Growth: The company’s income increased significantly from ₹5,452.47 lakhs in March 2023 to ₹7,633.22 lakhs in February 2024, implying strong business performance.
Equity and Liabilities: Equity has grown significantly from ₹1,532.99 lakhs to ₹2,366.82 lakhs, while liabilities have increased marginally. The debt-to-equity ratio has somewhat improved, indicating acceptable debt levels.
Profitability: The company’s profitability has significantly improved, with profit after tax growing from ₹172.06 lakhs to ₹847.10 lakhs. This indicates effective cost management and improved operational performance.
Earnings per Share (EPS): The basic EPS increased from ₹1.31 to ₹6.44, showing higher earnings per share for shareholders.
Return on Net Worth (RoNW): The RoNW has increased from 11.22% to 35.79%, indicating higher profitability and returns on shareholder equity.
Financial Position: Total assets have grown significantly, indicating prospective corporate expansion or asset acquisitions. The current ratio has declined marginally but still exceeds one, reflecting the company’s ability to satisfy short-term obligations.

DCG Wires And Cables IPO Limited – Fundamental Analysis

Particulars	As of 31st March 2023	As of 29th February 2024
Revenue (₹ in lakhs)	5,452.47	7,633.22
Equity (₹ in lakhs)	1,532.99	2,366.82
Expenses (₹ in lakhs)	5,225.24	6,507.04
Profit and Loss After Tax (₹ in lakhs)	172.06	847.10
RoNW (%)	11.22%	35.79%
Basic EPS only (₹)	1.31	6.44
NAV per Equity Share (₹)	11.57	17.94
Total Assets (in lakhs)	3,564.12	6,152.13
Total Liabilities (in lakhs)	2,031.13	3,785.31
Current Ratio (In times)	1.76	1.56
Debt Equity Ratio	1.18	1.09

DCG Wires And Cables Limited IPO – Peer Comparison

DCG Cables and Wires Limited reports moderate overall income and financial data. Cords Cable Industries Limited has better total income and EPS, but lower RoNW. Universal Cables Limited is the market leader, with a significant total income, strong EPS, and a competitive RoNW.

Company	Total Income (₹ in lakhs)	Face Value (₹)	EPS (₹)	RoNW (%)	NAV per Equity Share (Basic) (₹)
DCG Cables and Wires Limited	5455.18	10	1.31	11.23%	11.57
Cords Cable Industries Limited	52,764.72	10	5.52	4.58%	123.15
Universal Cables Limited	2,21,957.70	10	18.21	8.93%	203.87

DCG Wires And Cables Limited IPO Objective

The primary goal is to use IPO revenues to pay capital expenditures on building development, notably the relocation of manufacturing units to Bavla, as well as to meet expanding working capital requirements as the business expands significantly.

To meet capital expenditure for building construction: The company has opted to move its three manufacturing operations to Bavla, near Ahmedabad. The Rs. 5.36 crores raised from the IPO would be used to complete the building.
To meet working capital requirements: The company’s business expanded by 96.90%, nearly doubling in FY 2022-23 compared to FY 2021-22. To fulfill growing business demands, the company intends to use ₹ 38.79 crores from net proceeds to meet working capital requirements.

DCG Wires And Cables Limited IPO – Risks And Challenges

The company’s risks include the possibility of interruptions in Gujarat disrupting operations, potential negative effects from production facility or supplier concerns, and challenges from competitive pressures hurting financial performance and commercial viability.

The company supplies its products to consumers throughout Gujarat. In the event of a natural or developed disaster in the state of Gujarat, the entire corporate operation grinds to halt. Under these circumstances, the business’s revenue and profitability will suffer.
Any disruption, failure, or shutdown of production facilities or original equipment manufacturer suppliers may have a significant negative impact on the company’s financial situation, operating results, and cash flows.
The organization works in a competitive business climate. Competition from established competitors and new entrants, as well as pricing pressures, may have a negative impact on the business’s financial position and operating results.

DCG Wires And Cables Limited IPO – Industry & Market Potential

India is an appealing destination for foreign investment in the manufacturing industry. Several mobile phone, luxury, and automobile manufacturers, among others, have established or are planning to establish manufacturing facilities in the country. India’s manufacturing sector has the potential to reach $1 trillion by 2025. The adoption of the Goods and Services Tax (GST) will transform India into a common market with a GDP of US$ 3.4 trillion and a population of 1.48 billion people, attracting significant investors.

According to the Indian Cellular and Electronics Association (ICEA), legislative interventions could increase India’s total laptop and tablet manufacturing capacity to $100 billion by 2025. SAMARTH Udyog Bharat 4.0, also known as SAMARTH Advanced Manufacturing and Rapid Transformation Hubs, is one of the initiatives launched by India’s Ministry of Heavy Industries and Public Enterprises. This is projected to boost manufacturing sector’s competitiveness in the capital goods market.

DCG Wires And Cables Limited IPO Allotment Structure

DCG Wires And Cables Limited’s IPO allotment structure has three categories: Retail Individual Investors (RII) with investments under ₹2 lakhs, Other Investors exceeding ₹2 lakhs, and Market Makers.

Retail Individual Investors (RII): These individual investors apply for shares worth less than Rs. 2 lakhs.
Other than retail individual investors: Such applications have a value that exceeds INR 2 lakh.
Market Maker Reservation: A specific percentage of shares i.e. 2,52,000, has been allocated for market makers.