The initial public offering of Borana Weaves Ltd. has been subscribed 8.54 times on its first day of bidding on Tuesday.
The grey market premium of Borana Weaves IPO was Rs 60 as of 4:58 p.m. on Tuesday, according to InvestorGain. This implies shares of the company will likely list at Rs 276 apiece, with a 27.78% gain over the IPO price.
The offer consists of an issue of fresh shares worth Rs 144.89 crore. The price band has been set in the range of Rs 205 to Rs 216 per share.
The company aims to utilise Rs 713 crore toward financing a new manufacturing unit in Surat to expand grey fabric production, Rs 265 crore toward funding working capital requirements, and the remaining for general corporate purposes.
Borana Weaves: IPO Details
Issue opens: May 20.
Issue closes: May 22.
Issue price: Rs 205-216.
Fresh issue: Rs 144.89 crore.
Total issue size: Rs 144.89 crore.
Lot size: Minimum 69 shares, and then in multiples thereof.
Business
Borana Weaves is a textile manufacturer based in Surat, specialising in the production of unbleached synthetic grey fabric. This fabric serves as a fundamental material for further processing, such as dyeing and printing, across various industries including fashion, traditional textiles, technical textiles, home décor, and interior design.
In addition to grey fabric, Borana Weaves also manufactures polyester textured yarn, which is produced by heating polyester oriented yarn, a raw material used in the production of its grey fabric.
Borana Weaves IPO: Subscription Status Day One
The IPO has been subscribed 8.54 times as of 5:00 PM
Qualified institutional buyers: 1.5 times or 150%.
Non-institutional investors: 11.55 times.
Retail investors: 25 times.
Portion reserved for employees: Nil.
Borana Weaves IPO GMP Today
The grey market premium of Borana Weaves IPO was Rs 60 as of 2:02 p.m. on April 28, according to InvestorGain. This implies shares of the company will likely list at Rs 276 apiece, with a 27.78% gain over the IPO price.
It should be noted that GMP or grey market price is not an official price quote for the stock and is based on speculation.
Borana Weaves IPO: Key Risks
As of Dec. 31, 2024, over 98% of Borana Weaves' revenue is derived from customers based in Gujarat, with no long-term agreements in place. Changes or cancellations of purchase orders could adversely impact the company's business.
Borana Weaves has a limited operating history, having commenced operations in 2020.
The business is heavily reliant on the sale of grey fabric, which accounted for 84.24% of revenue from operations in the nine months ended Dec. 31, 2024. Any decline in sales volume, production capacity, or selling price of grey fabric could negatively affect the company's financial condition.
The company has incurred significant indebtedness, exposing it to various risks.
Disclaimer: Investments in initial public offerings are subject to market risks. Please consult with financial advisors and read the red herring prospectus thoroughly before placing bids.
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