Reviving the IPO Buzz: Strong Fundamentals and 30 per cent GMP - A Good Bet?
Between FY22 and FY24, the company delivered an impressive Compound Annual Growth Rate (CAGR) of 117 per cent in revenue and 262 per cent in net profit.
About the Issue:
Borana Weaves Ltd is preparing to launch its Initial Public Offering (IPO) for equity shares. See the issue details below.
| IPO Details |
| IPO Opening Date |
May 20, 2025 |
| IPO Closing Date |
May 22, 2025 |
| Issue Type |
Book Built Issue IPO |
| Face Value |
Rs 10 per equity share |
| IPO Price |
Rs 205 to Rs 216 per equity share |
| Min Order Quantity |
69 shares |
| Listing At |
BSE, NSE |
| Total Issue |
67,08,000 shares of FV Rs 10* |
| (Aggregating up to Rs 144.89 Cr)* |
| Fresh Issue |
67,08,000 shares of FV Rs 10* |
| (Aggregating up to Rs 144.89 Cr)* |
| QIB Shares Offered |
75% of the Offer |
| Retail Shares Offered |
10% of the Offer |
| NII (HNI) Shares Offered |
15% of the Offer |
| *At Upper Price Band |
|
Objects of the Issue
Since the offer is exclusively a fresh issue, it is noteworthy that the company will use the proceeds for its growth and expansion plans, rather than the funds flowing to promoters. The company plans to allocate the net proceeds raised from the fresh issue for the following purposes:
1. Proposing to finance the cost of establishing a new manufacturing unit to expand its production capabilities to produce grey fabric at Surat
2. Funding incremental working capital requirements
3. General corporate purposes
Promoter holding
Mangilal Ambalal Borana, Ankur Mangilal Borana, Rajkumar Mangilal Borana, Dhwani Ankur Borana, Mangilal Ambalal Borana HUF, Ankur Mangilal Borana HUF, Rajkumar Mangilal Borana HUF and Borana Filaments Pvt Ltd are the promoters of the company. The promoters currently hold a pre-issue shareholding stake of 87.19 per cent in the company.
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Company profile
Headquartered in Surat, the company is engaged in the manufacturing of unbleached synthetic grey fabric—a key raw material used across multiple industries for subsequent processes like dyeing and printing. Its applications span fashion, traditional textiles, technical fabrics, home décor, and interior design, making grey fabric an essential link in the textile supply chain. The inherent versatility of this fabric allows it to pair seamlessly with various unbleached textiles, catering to a broad range of styles and end uses.
In addition to grey fabric, the company also produces polyester textured yarn (PTY), which is derived by heating polyester-oriented yarn—a primary input in grey fabric manufacturing.
The company operates three manufacturing facilities in Surat, Gujarat. As of December 31, 2024, it had an installed base of 15 texturizing machines, 6 warping machines, 700 water jet looms, and 10 folding machines across its units, highlighting its integrated and scalable production infrastructure.
Financials
| Rs (in crore) |
FY22 |
FY23 |
FY24 |
9MFY25 |
| Revenue |
42.36 |
135.53 |
199.60 |
215.71 |
| Profit Before Tax |
2.19 |
19.90 |
28.39 |
35.58 |
| Net Profit |
1.80 |
16.30 |
23.59 |
29.32 |
The company has consistently demonstrated significant growth in revenue and profits over the past few years. Between FY22 and FY24, it achieved a Compound Annual Growth Rate (CAGR) of 117 per cent in revenue and 262 per cent in net profit.
If the current pace continues, annualized figures based on 9MFY25 suggest a 44 per cent growth in revenue and an impressive 65 per cent surge in net profit compared to FY24.
For FY24, the company delivered strong financial performance, recording a return on equity (RoE) of 49 per cent and a return on capital employed (RoCE) of 27 per cent.
Valuation & Returns
The issue is priced with a P/BV ratio of 5.63 times, calculated using its Net Asset Value (NAV) of Rs 38.40 as of December 31, 2024. At the upper price cap, it is priced at a P/BV ratio of around 2.6 times, considering its post-IPO NAV.
Considering the company's annualized FY25 earnings and fully diluted equity capital, the price-to-earnings (P/E) ratio is calculated at around 11x. Therefore, taking both valuation and returns into account, the issue appears to be fairly priced.
The company stated that, given its unique business model and product portfolio, there are no directly listed peers with a comparable business scope and scale of operations. Therefore, an industry comparison is not feasible.
Outlook
The Indian textile market is witnessing a significant shift toward synthetic textiles, driven by factors such as cost-effectiveness, durability, and low maintenance. Currently, polyester demand in India stands at around 4 million tonnes and is expected to grow to 6.7 million tonnes by 2025, reflecting a strong consumer inclination towards synthetic materials. Additionally, evolving fashion trends—marked by rising brand consciousness and fast-changing styles—are further boosting the appeal of synthetic textiles.
Considering the optimistic industry outlook, the company’s presence in a high-growth segment, and its strong financial performance, we recommend subscribing to this issue with a long-term investment perspective.