Borana Weaves IPO subscribed 1.8 times on Day 1; GMP points to 25% listing gain— Should you apply?

The initial public offering (IPO) of Borana Weaves was fully subscribed on Tuesday with an overall subscription of 1.79 times as of 11:05 AM on the first day of bidding, indicating a solid start to the nearly Rs 145 crore public offer.
ADVERTISEMENT Retail investors led the momentum with their portion subscribed 7.12 times, while the Non-Institutional Investor (NII) category saw 1.82 times subscription. The issue, which opened on May 20, will close on May 22. Listing is expected on May 27.
Grey Market Premium
Priced in a band of Rs 205 to Rs 216 per share, the IPO is generating investor buzz with a grey market premium (GMP) of Rs 55 as of early Tuesday, May 20. Based on the upper end of the price band at Rs 216, the IPO's estimated listing price is pegged at Rs 271, implying a potential listing gain of 25.46%.
Offer structure and key dates
The Rs 144.89 crore IPO is a book-built issue comprising a fresh issuance of 67.08 lakh equity shares. The price band is set at Rs 205 to Rs 216 per share. The minimum bid for retail investors is one lot of 69 shares (Rs 14,904 at the upper band), while small NIIs can bid for at least 14 lots (966 shares) at Rs 2,08,656, and big NIIs for 68 lots (4,692 shares) at Rs 10,13,472.
The IPO allocation reserves at least 75% of the shares for Qualified Institutional Buyers (QIBs), up to 15% for NIIs, and not more than 10% for retail investors. The anchor book opened on May 19. Beeline Capital Advisors is the book-running lead manager, while Kfin Technologies serves as registrar.
ADVERTISEMENT Share allotment is expected to be finalized on May 23, with credits to demat accounts by May 26.
Capital to fund expansion
ADVERTISEMENT Proceeds from the IPO will be used primarily to establish a fourth manufacturing unit in Surat, augment working capital, and cover general corporate expenses.'The proceeds from the IPO will support the expansion of our production infrastructure and help us address our working capital needs,' said Mangilal Ambalal Borana, Chairman and Managing Director of Borana Weaves.
ADVERTISEMENT Financials and business outlook
Founded in 2021 and based in Surat, Borana Weaves manufactures unbleached synthetic grey fabric used across fashion, home décor, and industrial applications. The company operates three manufacturing units equipped with 15 texturizing machines, 6 warping machines, 700 water jet looms, and 10 folding machines.Borana Weaves reported revenue of Rs 199.05 crore, EBITDA of Rs 41.17 crore, and PAT of Rs 23.58 crore for FY24. For the nine months ended December 2024, revenue reached Rs 211.61 crore with EBITDA of Rs 46.03 crore and PAT of Rs 29.30 crore.
ADVERTISEMENT The company's customer base is concentrated among wholesalers in Gujarat. With the global man-made fiber market expected to grow at 3.7% in 2025, Borana aims to expand its reach in both domestic and export markets.
Analyst view
Gaurav Garg of Lemonn Markets Desk said the IPO presents an attractive short-term bet, supported by strong listing gain potential, healthy financials, and solid investor interest in the grey market."Borana Weaves' IPO offers a compelling short-term opportunity, with strong listing gain potential driven by robust growth, healthy margins, and attractive GMP. The company's niche positioning and integrated manufacturing give it an edge, but high regional concentration and raw material volatility remain key risks," said Garg."At a P/E of ~17.5x, valuations seem fair, making it a suitable pick for retail and HNI investors looking to capitalize on debut momentum—while long-term investors may want to monitor execution and expansion before committing," said Garg.
Also read | Borana Weaves IPO opens for subscription with healthy GMP. Should you bid?
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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