Granite producer Midwest files papers for Rs 650-cr IPO

Midwest, one of the largest producers of Black Galaxy Granite, has filed draft papers with markets regulator Sebi to raise Rs 650 crore through an initial public offering (IPO). The Hyderabad-based company‘s IPO is a mix of fresh issue of shares up to Rs 250 crore and an offer-for-sale (OFS) of up to Rs 400 crore by promoters. The offer also includes reservation for subscription by eligible employees, according to the draft papers filed on Monday.

The OFS consists of sale of shares worth up to Rs 360 crore by Kollareddy Rama Raghava Reddy and up to Rs 40 crore by Guntaka Ravindra Reddy.

The company may consider raising Rs 50 crore in a ‘pre-IPO’ placement round. If such placement is completed, the fresh issue size will be reduced.

Proceeds from the fresh issuance to the tune of Rs 127.05 crore will be allocated for capital expenditure by Midwest Neostone, the company’s wholly-owned subsidiary, for the second phase of the quartz grit and powder processing plant.

Also, Rs 25.75 crore will be used for purchase of electric dump trucks and Rs 3.26 crore for integrating solar energy at selected mining locations.

An amount of Rs 53.80 crore will be used for payment of debt and the remaining funds for general corporate purposes. Midwest is India’s largest producer and exporter of Black Galaxy Granite, a premium variety of granite, which has a sparkling feature with flakes of a golden hue. It is used in real estate projects for applications including countertops and vanities, flooring, cladding, bathroom walls and floors The company’s revenue from operations increased by 16.54 per cent to Rs 585.62 crore in fiscal 2024 from Rs 502.52 crore in fiscal 2023, while profit after tax increased by 84.30 per cent to Rs 100.32 crore from Rs 54.44 crore.

DAM Capital Advisors, Intensive Fiscal Services and Motilal Oswal Investment Advisors are the book-running lead managers, and KFin Technologies is the registrar of the issue.