Key Points
- The Borana Weaves IPO GMP surged to 28% on the second day, reflecting strong investor interest.
- Research suggests the IPO was subscribed 8.5 times overall, with retail investors showing high demand.
- It seems likely that the company will list on May 27, 2025, with shares trading on BSE and NSE.
IPO Overview
Borana Weaves is raising Rs 144.89 crore through a fresh issue of equity shares, with a price band of Rs 205 to Rs 216 per share. The IPO opened on May 20, 2025, and will close on May 22, 2025.
Investor Response
The IPO saw robust subscription, with the retail portion booked 25 times and non-institutional investors at 12 times. This indicates strong market confidence in the company’s prospects.
Market Sentiment
The GMP surge to 28% suggests investors are optimistic, with expected returns around 29% based on grey market trends. The company’s financials, including Rs 215.71 crore in revenue and Rs 29.31 crore in net profit for nine months ending December 2024, likely contribute to this sentiment.
Detailed Analysis
Borana Weaves, a company in the textile sector, launched its initial public offering (IPO) on May 20, 2025, aiming to raise approximately Rs 144.89 crore through a 100% fresh issue of equity shares. The IPO, priced between Rs 205 and Rs 216 per share, has garnered significant attention from investors, as evidenced by its Grey Market Premium (GMP) surging to 28% on the second day of bidding. This surge reflects strong market sentiment and investor confidence, particularly given the robust subscription numbers and financial performance of the company.
Understanding Grey Market Premium (GMP)
The GMP, an unofficial indicator, represents the premium at which shares are traded in the grey market before official listing. For Borana Weaves, the GMP reached Rs 60, translating to a 28% premium over the upper price band of Rs 216. This means investors are willing to pay Rs 276 per share in the grey market, suggesting a listing price significantly higher than the issue price. Recent updates from market sources indicate the GMP fluctuated, with a high of Rs 63 reported, implying a potential 29% return, but the 28% figure aligns with the title’s focus.
Subscription Status and Investor Interest
The IPO’s subscription status, as of the second day, shows an overall subscription of 8.5 times. This strong response is driven by retail investors, who subscribed 25 times, and non-institutional investors at 12 times, while qualified institutional buyers (QIBs) participated at 1.6 times. Retail investors, in particular, showed enthusiasm, with a minimum lot size of 69 shares requiring an investment of Rs 14,904 at the upper price band, making it accessible to a broad investor base.
| Investor Category | Subscription Multiple |
|---|---|
| Overall | 8.5 times |
| Retail | 25 times |
| Non-Institutional | 12 times |
| Qualified Institutional Buyers (QIBs) | 1.6 times |
This table highlights the distribution of interest, with retail and non-institutional investors driving the bulk of the demand, reflecting confidence in Borana Weaves’ business model and growth potential.
Key IPO Details
The IPO is structured as a book-built issue, with shares proposed for listing on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on May 27, 2025. The timeline includes:
- IPO Open Date: May 20, 2025
- IPO Close Date: May 22, 2025
- Basis of Allotment: May 23, 2025
- Refunds: May 26, 2025
- Credit to Demat Account: May 26, 2025
- Listing Date: May 27, 2025
The face value of each share is Rs 10, with a retail quota not exceeding 10%, QIB quota up to 75%, and NII quota up to 15%. This allocation ensures a balanced participation across investor categories.
Use of Proceeds and Financial Performance
The proceeds from the IPO will be utilized for setting up a new grey fabric manufacturing facility in Surat, meeting incremental working capital needs, and general corporate purposes. This strategic allocation aims to enhance production capacity and support operational growth. Financially, Borana Weaves reported revenues of Rs 215.71 crore and a net profit of Rs 29.31 crore for the nine months ending December 2024, underscoring its profitability and operational efficiency.
Market Sentiment and Expected Listing
The surge in GMP to 28% indicates bullish market sentiment, with expected returns around 29% based on recent grey market trends. This optimism is further supported by the company’s strong subscription numbers and financial health. Investors are advised to monitor market trends closely, considering their risk appetite and investment goals, as the listing on May 27, 2025, approaches.
Detailed resources for further reading include the Draft Red Herring Prospectus (DRHP) and Red Herring Prospectus (RHP), available at Borana Weaves DRHP and Borana Weaves RHP, respectively, which provide comprehensive insights into the company’s operations and financials.
Conclusion
Borana Weaves IPO’s GMP surge to 28% on the second day, coupled with a subscription of 8.5 times, highlights strong investor interest and market confidence. With a clear plan for fund utilization and solid financials, the company is well-positioned for a promising listing on May 27, 2025. Investors should stay informed and make decisions aligned with their financial strategies.