Borana Weaves IPO Makes Strong Debut; Hits Upper Circuit

Shares of Borana Weaves made a strong debut on Dalal Street today, listing at Rs 243 — a 12.5% premium over its issue price of Rs 216. The stock was soon locked in the 5% upper circuit at Rs 255.15 on the National Stock Exchange, taking its gains to over 18% on listing day. More than 19 lakh shares changed hands on the exchange till 11:25 AM today.

According to reports, the IPO’s grey market premium stood at Rs 43-45 per share ahead of its debut, suggesting potential listing gains of nearly 20-22% for investors. Borana Weaves' IPO saw an overwhelming response, as it was subscribed by 148.78 times.

Non-institutional investors led the charge, and subscribed 237.42 times the total shares on offer for this category, while retail investors booked their portion 200.53 times. Qualified institutional bidders, on the other hand, subscribed 87.21 times the total shares on offer for this category. 

Borana Weaves is a Surat-based manufacturer of unbleached synthetic grey fabric, which serves as a fundamental material for dyeing and printing, in various industries, including fashion, traditional textiles, technical textiles, home décor, and interior design, according to the company’s draft papers. The company runs three units in Surat and its aggregate manufacturing capacity for grey fabric and polyester textured yarn is 233.28-mn meters per annum.

The company raised Rs 144.89 crore via IPO, which only comprised fresh issue of shares, it said in the prospectus. It had said that it intends to use Rs 71.35 crore of the total net proceeds to expand its production capacity by setting up a new unit at Surat. The proposed unit will likely have an annual capacity to produce 112.75 million meters of grey fabric and polyester textured yarn. Another Rs 26.50 crore will be used in funding working capital requirements, Borana Weaves had mentioned in the draft papers.

Its consolidated net profit for FY22 was Rs 1.8 crore, but this zoomed in the following year by more than 9 times to Rs 16.30 crore. Its earnings for FY24 further rose to Rs 23.59 crore, and by the end of nine months in December 2024, the company’s consolidated net profit surpassed the total earnings for FY24. During the Apr-Dec period, the grey fabric maker recorded a profit of Rs 29.31 crore.