📌 IPO Snapshot
- Company Name: Borana Weaves Limited
- Industry: Textile Manufacturing (Synthetic Grey Fabric)
- IPO Type: 100% Fresh Issue
- Issue Size: ₹144.89 crore
- Price Band: ₹205 – ₹216 per share
- Lot Size: 69 shares (Minimum investment: ₹14,145)
- IPO Dates: May 20 – May 22, 2025
- Listing Exchanges: NSE & BSE
- Lead Manager: Beeline Capital Advisors Pvt Ltd
- Registrar: Kfin Technologies
🏭 About Borana Weaves
Borana Weaves is a Surat-based textile manufacturer specializing in unbleached synthetic grey fabric, a crucial input for fashion, home décor, technical textiles, and traditional wear. The company operates three manufacturing units in Surat with an average capacity utilization rate of around 80% as of FY24 .
💰 Financial Highlights
- Revenue Growth: Between FY22 and FY24, revenue grew by 117% per annum.
- Profit Growth: Profit after tax increased by approximately 262% per annum in the same period.
- Return on Equity (ROE): 97% (3-year average)
- Return on Capital Employed (ROCE): 31% (3-year average)
- Net Debt-to-Equity Ratio: 0.72 times as of Q3 FY25
- Price-to-Earnings (P/E) Ratio: 24.4x (FY24 earnings)
- Price-to-Book (P/B) Ratio: 2.6x
📈 IPO Subscription Status
As of Day 2 (May 21, 2025):
- Overall Subscription: 29.5 times
- Retail Investors: 77 times
- Non-Institutional Investors (NII): 40.69 times
- Qualified Institutional Buyers (QIB): 1.67 times
💹 Grey Market Premium (GMP)
- Current GMP: ₹56
- Expected Listing Price: ₹272 (₹216 issue price + ₹56 GMP)
- Estimated Listing Gain: Approximately 26%
✅ Strengths
- Strategic Location: Proximity to 90% of raw material suppliers in Surat, enabling cost savings and efficient supply chain management.
- Strong Financial Performance: Significant growth in revenue and profits with high ROE and ROCE.
- Expansion Plans: Proceeds from the IPO will fund a new manufacturing unit in Surat and other corporate needs .
⚠️ Risks & Concerns
- Commoditized Product: Operating in a highly competitive synthetic grey fabric segment with limited pricing power.
- Dependence on Subsidies: Received ₹7.5 crore in electricity subsidy in FY24; withdrawal could impact financials.
- Contingent Liabilities: As of Q3 FY25, contingent liabilities were 13.4% of total equity.
- Negative Cash Flow in FY22: Although the company has been cash flow positive since then .
🧠 Expert Opinions
- Bajaj Broking: Recommends subscribing with a long-term view, noting good growth in income and profits. The IPO is considered fully priced but has good potential .
- Value Research: Highlights the company’s impressive financial metrics but cautions about its reliance on subsidies and the commoditized nature of its products .
🤔 Should You Subscribe?
Consider subscribing if:
- You’re seeking short-term listing gains, given the strong GMP and oversubscription.
- You believe in the company’s long-term growth potential in the textile sector.
Consider waiting if:
- You’re risk-averse and concerned about the company’s reliance on subsidies and the commoditized nature of its products.
- You prefer companies with strong brand recognition and pricing power.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a financial advisor before making investment decisions.
📢 Disclaimer
The information provided in this blog is intended solely for educational and informational purposes. It does not constitute financial advice, stock recommendations, or an offer to buy or sell any securities. Readers are advised to conduct their own research and consult with a qualified financial advisor before making any investment decisions. Please note that stock prices, financial data, and company information mentioned in this article are subject to change on trading days. For the most recent and accurate updates, kindly refer to the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) official websites. Incorporating images can effectively use internal links to enhance user engagement and navigation.
