Midwest IPO Subscription Begins: Telangana Granite Giant Eyes ₹451 Crore Raise

The initial public offering (IPO) of Midwest, a leading granite manufacturer from Telangana, opened on October 15.The IPO is set with a price range of₹1,014 to ₹1,065 per share, aiming to raise ₹451 crore. Anchor investors have already infused ₹135 crore, signaling strong institutional interest.

Market Performance on Day 1

• IPO Subscription Status: 12% overall
• Retail Investors: 17% subscribed
• Non-Institutional Investors (NII): 17% booked
• Qualified Institutional Buyers (QIBs): Yet to bid
• Employee Portion: 43% subscribed

By 10:27 IST, bids were received for 3,82,144 shares out of 31,17,460 shares on offer, reflecting cautious participation on the first day.

Company Overview

Midwest, formally known as Quartz Processor Midwest, is renowned for producing Black Galaxy and Absolute Black granite. The firm handles:

• Exploration and mining of natural stones
• Processing, marketing, and domestic distribution
• Export to international markets

Absolute Black Granite accounts for 10.8% of India’s black granite output (FY24). The company emphasizes sustainable production practices while maintaining high-quality standards that drive both domestic and global demand.

IPO Structure & Promoter Details

The IPO combines new shares and an offer-for-sale (OFS) by promoters:

• New Shares: ₹250 crore
• Offer-for-Sale (OFS): ₹201 crore
• Promoter Stake: 95.83%
• Other Shareholders: SVADHA India Emerging Opportunities Scheme 1 holds 4.17%

Funds raised through the OFS will go entirely to selling shareholders. Notably, SVADHA India acquired its stake at ₹709.80 per share in September 2024.

Allocation Breakdown

• 50% for Qualified Institutional Buyers (QIBs)
• 15% for Non-Institutional Investors (NII)
• 35% reserved for Retail Investors
• Employee reservation up to 1 crore shares

Financial Snapshot

Midwest has demonstrated strong growth from FY23 to FY25:

• Revenue CAGR: 11.6%
• EBITDA CAGR: 38.5%
• Adjusted PAT CAGR: 40.5%
• FY25 Revenue/EBITDA/Adj.PAT: ₹626 crore / ₹172 crore / ₹108 crore
• RoE / RoCE: 17.4% / 19.1%

Despite operating in a capital-intensive sector, the company has maintained robust margins and profitability. The upper price band of ₹1,065 values the company at a FY25 P/E of 35.8x and EV/EBITDA of 22.4x post-issue, reflecting a premium in comparison with peers.

Summary

The Midwest IPO marks a significant step for India’s granite industry, combining a mix of new capital and promoter sell-off. With strong anchor investor participation and a disciplined subscription model, the offering provides both institutional and retail investors a structured opportunity to participate in one of the country’s leading granite manufacturers.