Borana Weaves IPO Receives Strong Demand, Subscribed 8.54x on Day 1

The initial public offering (IPO) of Borana Weaves Ltd, launched on May 20, 2025, has seen an impressive response on its opening day, with the issue subscribed 8.54 times. The subscription period for the IPO, which will raise Rs 144.89 crore through the fresh issuance of up to 67,08,000 equity shares, will close on May 22, 2025.

Shares in the IPO are priced between Rs 205 and Rs 216 each, with a minimum lot size of 69 shares. As of Day 1, investors have placed bids for 3,15,01,122 equity shares, significantly exceeding the 36,89,457 shares offered.

Strong Interest Across Investor Categories

Retail investors have shown the most enthusiasm, subscribing to 25 times their reserved portion. Non-institutional investors (NIIs) have also participated robustly, with their portion subscribed 11.55 times. The segment allocated to qualified institutional bidders (QIBs) saw a more moderate subscription rate of 1.55 times.

The high demand has driven up the grey market premium (GMP) for Borana Weaves, which currently stands at Rs 63 per share, indicating potential listing gains of approximately 29%.

IPO Structure and Institutional Support

The IPO's share allocation is divided into 75% for QIBs, 15% for NIIs, and 10% for retail investors, reflecting a balanced approach to attract diverse investor segments. Prior to the IPO, Borana Weaves raised Rs 65.20 crore from 11 anchor investors, signalling strong institutional backing.

Beeline Capital Advisors is the book-running lead manager for the issue, and Kfin Technologies is handling the registration. The company plans to finalize share allotments by May 23, with the listing on the BSE and NSE expected on May 27, 2025.

Future Prospects and Valuation

Borana Weaves intends to use the proceeds from the IPO to expand its operations in the textiles sector. Anand Rathi has assigned a "Subscribe for long term" rating, noting that the company is priced at a PE ratio of 14.7 times its annualized FY25 earnings. This reflects a fully priced issue, but analysts believe that the company's shift to water jet looms and its focus on synthetic textiles could benefit it in the long run.

Gaurav Garg from Lemonn Markets Desk considers the IPO’s valuation "fair," suggesting it could be a good pick for retail and HNI investors looking for short-term gains. Long-term investors, however, may want to wait for further developments in the company’s execution and expansion before committing.

Key Dates

IPO Opening: May 20, 2025

IPO Closing: May 22, 2025

Basis of Allotment: May 23, 2025

Listing Date: May 27, 2025

Investors are advised to complete all application steps, including UPI mandate confirmation, by the cutoff time to participate in the IPO.