Midwest IPO: The initial public offering of Midwest will open for public subscription on Wednesday, October 15, and will remain open till Friday, October 17. The ₹ 451 crore mainboard IPO is a combination of a fresh issue of nearly 23 lakh shares to raise ₹ 250 crore and an offer for sale of 19 lakh shares for ₹ 201 crore.
Midwest IPO price band has been set at ₹1,014-1,065. As much as 50 per cent of the net offer is reserved for qualified institutional buyers (QIBs), while retail investors have been offered 35 per cent of the net issue; the remaining 15 per cent is reserved for non-institutional investors (NIIs).
Midwest IPO share allotment is expected to be finalised on Monday, October 20. Successful bidders can expect the shares allotted to their demat account on Thursday, October 23. Those who fail to receive the allotment will receive a refund on the same day.
Midwest shares are expected to list on the BSE and the NSE on Friday, October 24.
Meanwhile, the grey market does not appear to be upbeat about the issue, as the last grey market premium (GMP) of the stock was nil, indicating Midwest shares may list at par with the issue price.
Midwest IPO: 10 key things to know from RHP
Let’s take a look at 10 key things to know from the Red Herring Prospectus (RHP) of the Midwest IPO:
1. Promoter selling shareholder
Kollareddy Rama Raghava Reddy and Guntaka Ravindra Reddy are the two promoters selling shareholders in the OFS.
2. Midwest’s promoters
Kollareddy Rama Raghava Reddy, Kollareddy Ramachandra, Kukreti Soumya, and Uma Priyadarshini Kollareddy are the promoters of the company.
The promoters collectively hold an aggregate of 2,85,98,670 shares, representing 84.58 per cent of the pre-offer issued, subscribed, and paid-up share capital of the company.
3. Midwest’s management
The board comprises six directors, of which three are whole-time directors and three are independent directors.
Rana Som is the chairman and independent director of the company, and Kollareddy Ramachandra is the whole-time director and chief executive officer.
4. Midwest’s business overview
The company is engaged in the business of exploration, mining, processing, marketing, distribution and export of natural stones.
According to the RHP, Midwest is India’s largest producer and exporter of black galaxy granite, and holds a share of approximately 64 per cent of the Indian export market for Black Galaxy Granite in FY25.
It has 16 operational granite mines across six locations in Telangana and Andhra Pradesh. It also has established a resource base comprising 25 locations across Andhra Pradesh, Telangana, Karnataka and Tamil Nadu.
5. Midwest’s financial performance
The company’s revenue from operations in FY23 was ₹502.52 crore, which rose to ₹585.62 crore in FY24 and to ₹626.18 crore in FY25.
Profit after tax (PAT) in FY23 was ₹54.44 crore, which rose to ₹100.32 crore in FY24 and ₹133.3 crore in FY25.
6. Midwest IPO objects
The company intends to use the net proceeds from the fresh issue of shares for the investment in its wholly-owned subsidiary, Midwest Neostone Private Limited, by way of a loan, towards funding capital expenditure for phase II of the quartz grit and powder processing plant.
Some aspects of the issue will be utilised for the purchase of electric dump trucks and the investment in Andhra Pradesh Granite (Midwest) Private Limited, its material subsidiary, through a loan, for the acquisition of electric dump trucks.
Additionally, it intends to utilise some funds for capital expenditure on the integration of solar energy at certain mines, for the prepayment of certain loans, and for general corporate purposes.
7. Midwest’s peers
Pokarna is a major listed peer of the company. Pokarna is a small-cap company operating in the segment of granites and marbles. Midwest operates in an industry with a few large players.
8. Granite industry outlook
According to the company, granite production is projected to grow to 26,375-27,643 KT in fiscal 2030, logging a CAGR of 6-7 per cent between FY25-30. The production is expected to be driven by increased domestic demand as well as exports of granite.
9. Key internal risk
According to the RHP, one of its promoters, Kollareddy Rama Raghava Reddy, received a notice in 2015 from the Central Bureau of Investigation (CBI) regarding the formation and operations of the company’s subsidiary, BEML Midwest Limited.
“Any regulatory actions in relation to this notice, could adversely affect our and our promoter’s reputation or divert the time and attention of our management, and accordingly, may affect our business and results of operations,” said the company.
10. Key external risk
The company states that adverse macroeconomic conditions in India and globally could negatively impact its business, results of operations, and financial condition.