Borana Weaves IPO: Check out 10 key things to know from RHP before investing in ₹145 crore issue

Borana Weaves Ltd has set a price range of ₹205-216 per share for its forthcoming initial public offering (IPO), which is set to commence on May 20 and conclude on May 22. Bidding for anchor investors will begin on May 19.

The allotment basis will be determined on May 23, followed by the initiation of refunds and the crediting of equity shares on May 26. The company's shares are anticipated to be listed on stock exchanges on May 27.

The IPO consists entirely of a fresh issuance of 67.08 lakh equity shares. If priced at the upper limit of the band, the total size of the issue will reach ₹144.89 crore.

Out of the total proceeds, ₹71.35 crore will be directed towards establishing a new manufacturing facility in Gujarat to increase production capacity for grey fabric.

Here are 10 key things from the Red Herring Prospectus (RHP) that investors might want to know before subscribing to the issue.

Borana Weaves IPO Promoters

The company's promoters include Mangilal Ambalal Borana, Ankur Mangilal Borana, Rajkumar Mangilal Borana, Dhwani Ankur Borana, Ankur Mangilal Borana HUF, Rajkumar Mangilal Borana HUF, Mangilal Ambalal Borana HUF, and Borana Filaments Private Limited. According to the RHP, the promoters together own 17,382,795 equity shares, accounting for 87.19% of the pre-issue issued, subscribed, and paid-up equity share capital of the company.

Borana Weaves IPO Peers

There are no listed industry competitors in India or overseas, which could pose challenges in comparing and assessing their financial performance against other firms within the same sector.

Borana Weaves Manufacturing Facilities

Borana Weaves Limited runs three production plants in Surat, Gujarat, that are equipped with textile manufacturing technologies for multiple processes, such as texturising, warping, operating water jet looms, and folding textiles.

Borana Weaves Group Company

The firm includes several subsidiaries, including R&B Denims Ltd, Ricon Textile Private Ltd, Sachin Paper Mills Private Ltd, Arham Weaves Private Ltd, and Hojiwala Infrastructure Ltd.

Borana Weaves Financials

Borana Weaves has demonstrated substantial growth in the past three fiscal years. In FY 2024, the company reported revenues of ₹199.10 crore, marking a considerable increase from ₹135.40 crore in FY 2023 and ₹42.30 crore in FY 2022.

Borana Weaves Business

Borana Weaves is based in Surat, Gujarat, and specialises in producing unbleached synthetic grey fabric. This fabric is frequently used as a base for further processing (like dyeing and printing) in industries such as fashion, traditional textiles, technical textiles, home decor, and interior design.

Borana Weaves Assets

As of September 30, 2024, the firm operated a total of 15 texturizing machines, 6 warping machines, 700 water jet looms, and 10 folding machines across its three facilities.

Borana Weaves IPO Industry

India's textile sector, a significant contributor to the global marketplace, achieved textile exports exceeding USD 44 billion in the fiscal year 2022, accounting for approximately 15% of the country's overall export revenue and 4.6% of worldwide textile commerce. The primary exports of the industry include ready-made garments, cotton textiles, and a growing share of man-made fibers. Key markets consist of the United States, the European Union, Bangladesh, the United Kingdom, and the United Arab Emirates.

Borana Weaves IPO - Key Risks

Some of the key risks are as follows;

1. If the necessary approvals, licenses, or permits to operate Proposed Unit 4 are not obtained, it may negatively impact their business, financial status, cash flows, and operational results.
2. As of December 31, 2024, over 98% of their revenue comes from customers in Gujarat, and they lack long-term agreements with these clients. Any alterations or cancellations of purchase orders from these customers, or their inability to accurately predict demand for their products, may negatively affect their business, operational results, and financial health.

Lock-in of equity shares allotted to anchor investors

Any equity shares allocated to anchor investors in the anchor investor segment will be subject to a lock-in period as follows: 50% of the equity shares allocated to each anchor investor will have a 90-day lock-in period starting from the date of allotment, while the remaining 50% will be locked in for 30 days from the date of allotment.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.