Borana Weaves IPO: A Promising Opportunity in India’s Textile Sector
FINANCE
India’s textile industry is a cornerstone of its economy, contributing significantly to exports and employment. Amid this vibrant landscape, Borana Weaves Limited, a Surat-based textile manufacturer, has launched its Initial Public Offering (IPO), aiming to raise ₹144.89 crore. With a strong growth trajectory and a strategic expansion plan, this IPO is generating buzz among investors. Here’s an in-depth look at Borana Weaves’ IPO, its potential, and what investors need to know.
About Borana Weaves Limited
Founded in 2020, Borana Weaves is a rising star in the textile sector, specializing in unbleached synthetic grey fabric and polyester textured yarn (PTY Yarn). These products serve as essential raw materials for industries like fashion, traditional textiles, technical textiles, home decor, and interior design. Operating three state-of-the-art manufacturing units in Surat, Gujarat, the company boasts advanced technology, including 15 texturizing machines, 6 warping machines, 700 water jet looms, and 10 folding machines as of September 2024. With a production capacity that quadrupled from 55 million meters to 220 million meters annually between 2021 and 2024, Borana Weaves is well-positioned to capitalize on India’s growing textile demand.
IPO Details
The Borana Weaves IPO is a book-built issue comprising a fresh issue of 67.08 lakh equity shares with a face value of ₹10 each. There is no offer-for-sale component, meaning all proceeds will fund the company’s growth initiatives. Here are the key details:
Issue Size: ₹144.89 crore
Price Band: ₹205–₹216 per share
Lot Size: 69 shares (minimum investment of ₹14,904 at the upper price band)
Subscription Dates: May 20, 2025, to May 22, 2025 (anchor investor bidding on May 19, 2025)
Allotment Date: Expected on May 23, 2025
Share Crediting: To demat accounts by May 26, 2025
Listing Date: Tentative listing on BSE and NSE on May 27, 2025
Allocation: 75% for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), 10% for retail investors
The IPO is managed by Beeline Capital Advisors Pvt Ltd, with Kfin Technologies Limited as the registrar.
Financial Performance
Borana Weaves has shown impressive financial growth:
FY24: Revenue of ₹199.90 crore, net profit of ₹23.59 crore
9M FY25 (ended Dec 31, 2024): Revenue of ₹215.71 crore, net profit of ₹29.31 crore
Market Capitalization: ₹575.54 crore at the upper price band
P/E Ratio: 24.4x (FY24), 14.8x (FY25 TTM basis)
This growth reflects the company’s ability to scale operations and meet market demand, with 98% repeat orders underscoring strong customer loyalty.
Use of Proceeds
The IPO proceeds will fuel Borana Weaves’ expansion plans:
₹71.35 crore for establishing a new manufacturing unit (Unit 4) in Surat to boost grey fabric production
Funding incremental working capital requirements
General corporate purposes
These investments aim to enhance production capacity and strengthen the company’s market position.
Grey Market Premium (GMP)
As of May 16, 2025, the Grey Market Premium (GMP) for Borana Weaves IPO was ₹55 per share, indicating a potential listing gain of ~25.46% (estimated listing price ~₹271). This suggests a profit of approximately ₹3,795 per lot of 69 shares if trends hold. However, GMP is unofficial and subject to change, so investors should approach it cautiously.
Strengths
Robust Growth: Revenue surged from ₹42.33 crore in FY22 to ₹199.05 crore in FY24, with production capacity expanding significantly.
Customer Loyalty: 98% repeat orders reflect high customer satisfaction.
Industry Tailwinds: India’s textile industry, with USD 44 billion in exports in FY22, offers strong growth potential.
Strategic Expansion: The new manufacturing unit will enhance capacity and competitiveness.
Risks
Supplier Dependency: Lack of long-term agreements for raw materials (POY Yarn) could lead to supply disruptions.
Competitive Landscape: The textile industry is highly competitive, with pricing pressures impacting margins.
Intellectual Property: Unregistered trademarks may pose risks to brand identity.
Market Sentiment
Posts on X highlight positive investor sentiment, with the GMP suggesting strong listing potential. As a rare mainboard IPO, Borana Weaves is drawing attention, with expectations of more such offerings in 2025. The low retail allocation (10%) may lead to oversubscription, so bidding at the cutoff price (₹216) is advisable to improve allotment chances.
How to Apply
Investors can apply online via UPI or ASBA through platforms like Zerodha, Upstox, 5Paisa, or banks (e.g., HDFC, SBI). Check allotment status on Kfin Technologies’ website post-allotment.
Should You Invest?
Borana Weaves IPO offers a compelling opportunity for investors seeking exposure to India’s thriving textile sector. The company’s strong financials, capacity expansion plans, and favorable GMP suggest decent listing gains. However, risks like supplier dependency and industry competition require careful consideration. Investors should review the Red Herring Prospectus (RHP) and consult a financial advisor before applying.