Borana Weaves IPO to open on Tuesday: Check key details, latest GMP & analysts views

Borana Weaves, a Surat-based manufacturer of unbleached synthetic grey fabric, is launching its initial public offering (IPO) tomorrow, that is Tuesday, May 20. The IPO will close for bidding from on Thursday, May 22. The shares are priced between Rs 205 and Rs 216 each, and investors can subscribe in lots of 69 shares. The company aims to raise Rs 144.89 crore through this fresh share sale of 67,08,000 equity shares.

The IPO's grey market premium (GMP) is currently Rs 55 per share, suggesting a potential gain of 25.46% for investors over the upper end of price band. If the current trends persist, investors could potentially earn Rs 3,795 on each lot of 69 shares. The GMP has remained stable, even after some correction from Rs 63 levels.

Borana Weaves is valued at FY25 annualized P/E and EV/Ebitda multiple of 14.4 times/10.3 times respectively of its post-issue capital at upper price band. The company’s revenue, Ebitda and PAT achieved CAGR of 116.8 per cent, 182.1 per cent and 262.1 per cent to Rs 199 crore, Rs 41 crore and Rs 24 crore respectively during FY22- FY24 period, said SBI Securities.

"Given the favorable industry outlook and the company’s diversification and expansion plans, we recommend the investors to subscribe the issue for a long-term horizon, however looking at the relatively smaller scale of business and smaller historical track record, investors should note that it will fit in a high-risk, high-return investment profile," it said.

Founded in 2020, Borana Weaves produces unbleached synthetic grey fabric used across various sectors, including fashion and home decor. The company's financial performance for the nine months ending December 31, 2024, includes a net profit of Rs 29.31 crore and revenue of Rs 215.71 crore. This solid performance has set a foundation for the IPO, with the company's market capitalisation expected to reach Rs 575.54 crore.

Borana Weaves is engaged in the business of producing and marketing of unbleached synthetic grey fabrics for the B2B segment. It posted spectacular growth since FY23 onwards with rise in top and bottom lines. Its shift from conventional process to water jet loom process yielded the desired benefits, said Bajaj Borking.

"Based on its financial data, the issue appears fully priced. Well-informed investors may park funds for medium term. Based on FY24 earnings, the P/E stands at 24.41. Thus, the issue is fully priced," it said.

Investment allocations are set with 75% reserved for qualified institutional buyers, 15% for non-institutional investors, and the remaining 10% for retail investors. This allocation strategy is designed to ensure a balanced participation across different investor categories. 

The anchor book for the IPO will open on Monday, May 19, marking the start of the subscription process. Beeline Capital Advisors is the sole book-running lead manager, with Kfin Technologies serving as the registrar. The allotment of shares is scheduled for finalisation on Friday, May 23.

Shares of Borana Weaves are expected to list on both the BSE and the National Stock Exchange (NSE) on May 27. This dual listing is anticipated to increase the company’s visibility and accessibility to a broader investor base.

The IPO represents a significant step for Borana Weaves in enhancing its capital base to support further growth and expansion. With the promising grey market trends, investors and analysts alike are watching closely to see if the expected returns materialise post-listing.