Borana Weaves IPO: Issue booked over 20x on day 2 so far; check latest GMP

The initial public offering (IPO) of Borana Weaves has garnered significant attention from investors, particularly retail investors. As the IPO, which opened on May 20, 2025, approaches its closing date on May 22, it has already seen high subscription rates. Shares are offered in the price range of Rs 205-216, and the company aims to raise Rs 144.89 crore through the issuance of 67,08,000 equity shares.

According to the data, the investors made bids for 7,40,09,952 equity shares, or 20.06 times, compared to the 36,89,457 equity shares offered for the subscription by 1.25 pm on Wednesday, May 21. The retail segment was notably oversubscribed, attracting subscriptions 56.36 times over its allocation, while non-institutional investors (NIIs) saw a subscription rate of 32.42 times. However, the quota for qualified institutional bidders (QIBs) lagged significantly, achieving 1.63 times for the allocation. 

Borana Weaves, a Surat-based manufacturer, was incorporated in 2020 and specialises in producing unbleached synthetic grey fabric. This material serves various industries, including fashion, traditional textiles, and home decor, due to its versatility and application in processes such as dyeing and printing. The company's unique market positioning and the predicted listing gains have generated considerable excitement among investors.

The grey market premium (GMP) for Borana Weaves has been rising, reflecting investor confidence despite volatile market conditions. Currently, the GMP stands at Rs 52-55 per share, suggesting a potential 24-26% increase in listing value. The premium has shown positive momentum, increasing from Rs 55 the previous day, indicating strong demand and optimistic outlooks for the IPO's debut on the stock exchange.

Beeline Capital Advisors is managing the IPO process, with Kfin Technologies serving as the registrar. The allotment of shares is expected to be decided by May 23, and the listing on both the BSE and NSE is planned for May 27. This strategic timing aims to maximise investor interest and market readiness for the share debut.

The IPO structure reserves 75% of shares for QIBs, 15% for NIIs, and 10% for retail investors. Despite the lower subscription rate for QIBs, the overall response has been robust, with total bids for 1,74,36,231 equity shares, or 4.81 times the offered shares. This level of interest underscores the attractiveness of Borana Weaves' market entry, bolstered by its comprehensive growth strategy and anticipated market performance.

Investment analysts have largely positive views on the IPO, citing Borana Weaves' strong growth potential and strategic industry position. Borana Weaves intends to set up new manufacturing unit to reach 346 million meter per annum capacity and continue to capitalize on growing demand for synthetic fabric. It is foraying into production of high margin technical textile is expected to further improve business margins, said Indsec Research.

"In FY24, Borana's ROE and ROCE was at 49.5% and 24.3% respectively. We have a 'subscribe' rating for the IPO on account of strong industry growth tailwinds, higher capacity utilization (75%) in existing facility coupled with new facility and diversifying into high margin products," it added.

Gujarat government incentives have reduced its borrowing cost from 8.5% to 3.5%, though policy changes may impact this. Top 5 customers contribute 39% of FY24 sales, with over 50% of revenue from key segments concentrated among them, creating customer concentration risk—some linked to promoter group, said Canara Bank Securities.

"Receivables rose 96% in 9MFY25 despite only 6% revenue growth, increasing receivable days from 17 to 28, indicating weak collections and potential working capital stress. Due to these risks and valuation concerns, a 'neutral' IPO rating is advised, though investors with a long-term perspective may consider the opportunity, based on individual analysis," it said.