Borana Weaves IPO opens for subscription: GMP up 25%; should you subscribe?

Business Standard

20-05-2025

Borana Weaves IPO: The initial public offering (IPO) of unbleached synthetic grey fabric manufacturer, Borana Weaves, opens for public subscription today, Tuesday, May 20. At the upper end, the company seeks to raise ₹144.89 crore from the public offering.
Ahead of the opening of the public offering, Borana Weaves successfully raised ₹65.20 crore from anchor investors in a bidding that concluded on Monday, May 19.
As the public offering opens for subscription, here are the key details of the Borana Weaves IPO:
Borana Weaves IPO structure
Borana Weaves IPO is a book-built issue, which comprises an entirely fresh issue of 6.7 million equity shares. The public offering of Borana Weaves does not have any offer-for-sale (OFS) component.
Borana Weaves has reserved not less than 75 per cent of the net offer for qualified institutional buyers, not more than 10 per cent for retail investors, and not more than 15 per cent for non-institutional investors.
Borana Weaves IPO price band, lot size
The public issue is available at a price band of ₹205–216 per share, and a lot size of 69 shares. Thus, investors can bid for a minimum of 69 shares of Borana Weaves IPO and in multiples thereof.
A retail investor would require a minimum of ₹14,904 to bid for one lot of Borana Weaves IPO, and a maximum of 13 lots or 897 shares, amounting to ₹1,93,752.
Borana Weaves IPO grey market premium (GMP)
The unlisted shares of Borana Weaves were commanding a strong premium in the grey market ahead of the opening of the public issue. Sources tracking unofficial market activities revealed that Borana Weaves shares were seen trading at around ₹271 per share, reflecting a grey market premium (GMP) of ₹55 or 25.46 per cent over the upper end of the issue price.
Borana Weaves IPO allotment date, listing date
The three-day subscription window to bid for the Borana Weaves IPO is expected to close on Thursday, May 22, 2025. Following the closure of the subscription window, the basis of allotment of Borana Weaves shares is likely to take place on Friday, May 23, 2025. The successful allottees will receive the company's shares into their demat account on Monday, May 26, 2025.
Shares of Borana Weaves are scheduled to make their D-Street debut on Tuesday, May 27, 2025, by listing on BSE and NSE.
Borana Weaves IPO registrar, lead manager
KFIN Technologies serves as the registrar for the Borana Weaves IPO, while Beeline Capital Advisors is the sole book-running lead manager.
Borana Weaves IPO objective
Borana Weaves, as outlined in its Red Herring Prospectus (RHP), will utilize the net proceeds from the public issue to finance the cost of establishing a new manufacturing unit to expand its production capabilities to produce grey fabric in Surat, Gujarat, India. The company will further use the IPO proceeds for funding incremental working capital requirements and general corporate purposes.
Should You Subscribe to the Borana Weaves IPO?
Anand Rathi Research Team - Subscribe for long-term
Analysts from the Anand Rathi Research Team have recommended that investors subscribe to the Borana Weaves IPO for the long term. "At current valuation, based on annualised FY25, it is seeking a PE of 14.7 times. The FY24 earnings PE stands at 24.4 times, and post-issue market cap comes at ₹575.5 crore, with this the issue is fully priced," wrote the analysts in a research report.
The analysts believe that the company's shift to water jet looms could benefit it over the long term with high yields, further capitalizing on its top and bottom lines. Additionally, changing fashion trends, rising brand awareness, and fast-changing styles are boosting demand for India's synthetic textiles, which stand to gain in both domestic and export markets.
SMIFS - Subscribe
Brokerage firm SMIFS in its report has recommended subscribing to the Borana Weaves IPO, as Borana has the highest Ebitda margin (21 per cent) and ROE and ROCE (65.69 per cent and 36.29 per cent) respectively among peers in FY24. "It is expected to grow more compared to its peers due to its capacity expansion initiatives, expanding customer base, and diversification into high-margin products with its investments in water jet looms, folding machines, and warping machines," said SMIFs in its report.
The brokerage believes that Borana is poised to benefit significantly from the strong structural growth in India's synthetic textile industry, with domestic polyester demand projected to grow from 4 million tonnes to 6.7 million tonnes by 2025. Global man-made fibre demand is also expected to expand by 3.7 per cent during the same period.
About Borana Weaves
Incorporated in 2020, Borana Weaves specializes in manufacturing unbleached synthetic grey fabric, a key input for dyeing, printing, and finishing across industries like fashion, traditional technical textiles, interior design, and home décor. It also produces polyester textured yarn (PTY), derived from polyester oriented yarn (POY), which is used in grey fabric production, ensuring vertical integration within its textile operations.
Borana Weaves Financial Snapshot
In the financial year 2023–24 (FY24), the profit attributable to the owners of the company rose 44.66 per cent year-on-year (Y-o-Y) to ₹23.58 crore from ₹16 crore reported in FY23. For the nine-month period ended on December 31, 2024, it stood at ₹29.30 crore.
The company's revenue jumped 47 per cent Y-o-Y to ₹199.1 crore in FY24 from ₹135.4 crore reported a year ago. For the nine-month period ended on December 31, 2024, the company's revenue stood at ₹211.61 crore.
Borana Weaves' total expenditure also rose to ₹171.21 crore in FY24, up 48.1 per cent from ₹115.6 crore reported in FY23. It stood at ₹179.39 crore for the nine-month period ended on December 31, 2024.