Borana Weaves IPO — Should You Subscribe? Read Anand Rathi's Analysis

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Anand Rathi Report

Borana Weaves Ltd. will launch its initial public offering on May 20 and the offer will remain open for subscription till May 22. The Gujarat-based synthetic grey fabric supplier has fixed the price band in the range of Rs 205 and Rs 216 per share. The minimum order lot for bidding is 69.

The Rs 144.89 crore IPO comprises only of fresh issue with no component of offer-for-sale.

Objects of the Issue

• Financing new grey fabric manufacturing unit in Surat, Gujarat. 

• Funding incremental working capital & General purpose.

Valuation & outlook

Borana Weaves 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.

With the global market for man-made fibres set to grow by 3.7% by 2025, India’s synthetic textile industry stands to gain, with strong growth chances in both local use and exports.

On valuation parse, based on annualised FY25 it is seeking PE of 14.7 times, FY24 earnings PE stands at 24.4 times and post issue market cap comes at Rs 5,755 ,million with this the issue is fully priced.

We believe that company’s shift to water jet loom could benefits over long term with high yields further capitalizing its top and bottom lines additionally changing fashion trends, rising brand awareness, and fast-changing styles are boosting demand for India’s synthetic textiles stand to gain in both domestic and exports.

Therefore, we recommend the issue can be consider as 'Subscribe for long-term'.

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