The textile industry has a lively atmosphere as Surat-based Borana Weaves Limited is getting ready to launch its Initial Public Offering (IPO). If you are interested in including this textile company in your investments, check the opinions of analysts and see what the Grey Market Premium suggests.
In this deep insight, you are going to know about the Borana Weaves IPO.
What, When, and How Much?
Shares of Borana Weaves, which produces unbleached synthetic grey fabric, will be offered for public subscription on May 20, 2025. People interested in building skyscrapers will have until May 22, 2025, to make offers in the auction.
The company is planning to raise ₹144.89 crore by issuing 67.08 lakh new equity shares. Since shares are priced between ₹205 and ₹216, retail investors can find it easy to add this company to their portfolio within the manufacturing sector.
If you want to participate in retail, you need to invest a minimum of one lot consisting of 69 shares at an upper price of ₹14,904. Small non-institutional investors should buy 966 shares, while large NIIs have to bid for at least 4,692 shares.
What Are the Early Signals?
Several weeks ahead of its launch, shares for Borana Weaves are already sought after in the grey market. The premium has reached ₹64 over the issue price since the last update, meaning the price for listing is likely to be about ₹280.
Since the stock is priced at 30% above the highest end of the IPO price range, it suggests that investors are very confident in the company. Even though grey market premiums can’t always predict how a listing will perform, they still tend to represent the market’s opinion and help those considering investing.
In spite of falling from its peak of ₹63, the GMP has continued to appear strong. Since the stock has not moved much, it is clear investors are still interested.
Key Dates to Mark on Your Calendar
For those planning to participate, here’s the timeline to follow:
- Anchor Investor Bidding: May 19, 2025
- IPO Opening: May 20, 2025
- IPO Closing: May 22, 2025
- Share Allotment Finalization: May 23, 2025
- Refund Initiation (for unsuccessful applicants): May 26, 2025
- Shares Credited to Demat Accounts: May 26, 2025
- Expected Listing Date: May 27, 2025 (on both BSE and NSE).
Who is Borana Weaves?
Borana Weaves started in 2020-2021 and has already become well-known in synthetic textile production. The main product the company makes is unbleached synthetic grey fabric, which is valuable for use in fashion, indoors and in various industries.
The company has developed a strong reputation for making quality products due to the three modern factories operating in Surat. They are equipped with innovative texturizing machines, water-jet looms and modern warping technology.
What makes Borana Weaves particularly interesting is its impressive growth trajectory.
The company has achieved remarkable financial performance in recent years:
- Revenue Growth: 116.8% CAGR during FY22-FY24, reaching ₹199 crore.
- EBITDA Growth: 182.1% CAGR in the same period, touching ₹41 crore.
- PAT Growth: An impressive 262.1% CAGR, reaching ₹24 crore.
For the nine months ending December 31, 2024, the company reported a net profit of ₹29.31 crore on a revenue of ₹215.71 crore, demonstrating continued strong performance.
Where Will the investor money be utilized?
Investors naturally want to know how their capital will be utilized. Borana Weaves has outlined clear plans for the IPO proceeds:
- Expansion Plans: Establishing a fourth manufacturing unit in Surat to increase production capacity for synthetic grey fabric
- Working Capital Requirements: Strengthening the company’s operational resources
- General Corporate Expenses: Supporting broader business growth initiatives
This strategic allocation aims to enhance production capabilities while ensuring the company has adequate financial flexibility to capitalize on emerging opportunities in the textile sector.
What Analysts Are Saying
Market analysts have offered mixed but generally positive perspectives on the Borana Weaves IPO:
SBI Securities advises that investors subscribe to the issue because the industry outlook is good and the company wants to diversify further. At the same time, they note that because these businesses are small and have less of a track record, they are considered high-risk, high-reward investments.
Bajaj Broking noticed that since FY23, the company has achieved fantastic growth, while using water jet looms has proven highly beneficial. The analysts see the issue as reflected in the FY24 earnings they expect, so its PE ratio is 24.41. They deem it acceptable for informed investors in the foreseeable future.
IPO Structure and Allocation
The subscription structure follows regulatory guidelines with specific allocations:
- 75% reserved for Qualified Institutional Buyers (QIBs)
- 15% for Non-Institutional Investors (NIIs)
- 10% for Retail Individual Investors (RIIs)
Beeline Capital Advisors is managing the IPO as the sole book-running lead manager, while Kfin Technologies is handling registrar duties.
Should You Invest?
Whether the Borana Weaves IPO is right for your portfolio depends on several factors, including your investment horizon, risk tolerance, and sector outlook.
Positive factors to consider:
- Impressive historical growth rate across revenue and profitability metrics
- Strong grey market premium indicating positive investor sentiment
- Clear expansion plans with the addition of a fourth manufacturing facility
- Specialized focus in synthetic grey fabric manufacturing
Points of caution:
- Relatively young company with limited operating history (founded in 2020-2021)
- Fully priced valuation at approximately 24.41x P/E based on FY24 earnings
- Potential for volatility in the textile manufacturing sector
- Competition from established players in the industry
India’s Textile Push Gets a Boost from Borana Weaves
This is an interesting time for the Indian textile sector as Borana Weaves goes public. Because businesses are expanding manufacturing operations globally, Indian textile producers are likely to gain a bigger share of the market.
Because the company emphasizes synthetic grey fabric, which is applied in many industries, it can take advantage of several segments and cope with changes in a single sector.
Final Thoughts
Borana Weaves IPO is a good way to invest in a textile manufacturer that is growing fast and has strong finances. The rise in the grey market shows that investors are confident about the company. Nevertheless, since the company is young and valued highly, there are risks involved.
For those aiming for a long-term investment and who believe the textile industry in India will see growth, this might be a good IPO to consider. Even so, watching the listing on May 27, 2025, could help you understand the market better.
If you decide not to take part in the Borana Weaves IPO, you can still watch it when it goes public on May 27, 2025, as it may offer useful information on demand for manufacturing stocks with growth potential now.
