The positive sentiment stems from strong investor demand, robust financials and the company’s dominant position in the premium granite export segment.
Strong subscription
The IPO, which took place between October 15 and 17, received an overwhelming response and was subscribed a total of 92.36 times. The non-institutional investor (NII) category led with a huge subscription of 176.57 times, followed by QIBs at 146.99 times and retail investors at 25.52 times. The company also raised Rs 135 crore from key investors ahead of the issue, reflecting strong institutional interest. Analysts said the enthusiasm among investors underlines confidence in India’s natural stone export potential and the company’s expansion into value-added products such as quartz processing and solar-integrated mining operations.
About the company
Founded in 1981, Midwest operates 16 granite mines in Telangana and Andhra Pradesh and produces high-quality stones such as Black Galaxy, Absolute Black and Tan Brown. The company exports to 17 countries on five continents, with China, Italy and Thailand as its main markets. It employs more than 1,300 people and is expanding its operations with electric dump trucks and the integration of solar energy in selected mines to improve sustainability and efficiency.
Financial performance
Midwest has reported strong and consistent financial growth in recent years. For FY25, the company posted a 7% increase in revenue to Rs 643 crore and a 33% increase in profit to Rs 133 crore, with PAT margins of 17.2% and EBITDA margins of 27.4%. The country also maintains healthy leverage levels, with a debt-to-equity ratio of 0.43.
The company’s return on equity (ROE) and return on invested capital (ROCE) were 19.4% and 18.8% respectively – among the best in the industry.
List prospects
Given strong fundamentals, premium product mix and steady export demand, analysts expect the Midwest to make a positive market debut, although valuations appear on the higher side. Post-issuance, the company’s price-to-earnings ratio is approximately 39x FY25 earnings, which many consider aggressive compared to other publicly traded peers.
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At a GMP of around 10%, the quotation is expected to be stable rather than spectacular.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)
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