Borana Weaves IPO subscribed 8.5x on Day 1, retail portion booked 25x

Borana Weaves

The Rs 145-crore Borana Weaves IPO saw strong subscription on May 20 by getting booked over 8.5 times on its first day of bidding. Retail investors led the subscription rally by booking their reserved portion nearly 25 times.

The IPO received bids for 3.15 crore shares, as against its offer size of 36.89 lakh shares, according to data available on the NSE. While retail investors took the lead, non institutional investors (NII) followed by booking their reserved portion 11.54 times. The portion reserved for Qualified Institutional Buyers (QIBs) was also fully subscribed by the end of the day, after seeing a muted response during the early hours.

Borana Weaves is raising Rs 144.89 crore via an initial public offering of 67.08 lakh shares at the upper price band. The IPO solely comprises a fresh issue of shares, and will remain open for public bidding till May 22. The textile company has set a price band of Rs 205-216 per share for the IPO.

Investors can bid for 69 shares with a minimum investment of Rs 14,904, and in multiples thereafter. The shares of the company are likely to be listed on stock exchanges on May 27.

Borana Weaves IPO Grey Market Premium:

The unlisted shares of the company were trading at Rs 271 apiece in the grey market, as per data on Investorgain. This implies a grey market premium (GMP) of over 25 percent over the IPO price of Rs 216 apiece.

Should you apply?

"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 Gaurav Garg from the Lemonn Markets Desk.

"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," he added.

Anand Rathi advised investors to subscribe to the IPO for long term. "Borana Weaves Ltd is involved in manufacturing and marketing of unbleached synthetic grey fabrics, catering primarily to the B2B segment. The versatility of grey fabric allows it to complement a wide range of unbleached fabrics across different styles, making it a valuable resource in the textile supply chain. This vertical integration gives Borana Weaves better control over quality, cost, and delivery schedules. The company is well-placed to establish direct and strategic regional presence to ensure efficient product delivery and maintain high levels of service responsiveness, thereby reinforcing customer trust and loyalty," the brokerage said.

The company intends to utilise IPO proceeds for establishing a new manufacturing unit to expand its production capabilities to produce grey fabric at Surat, Gujarat. Further, the funds will be used for incremental working capital requirements and general corporate purposes.

Beeline Capital Advisors is acting as the sole merchant banker for Borana Weaves' IPO.

Anchor Book:

A day before the IPO opened for subscription, the textile company raised Rs 65.2 crore from 11 institutional investors via an anchor book on May 19. The company, in its filing to exchanges, said it has finalised the allocation of 30,18,543 equity shares to anchor investors at Rs 216 per equity share. Pink Oak Global Fund, Innovative Vision Fund, Aarth EIF Growth Fund, Saint Capital Fund, Nexus Equity Growth Fund, and Sunrise Investment Trust were amongst 11 anchor investors.

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