Midwest plans Rs 650 crore IPO to expand operations

04 Oct 2024 CW Team

The proposed IPO will consist of a fresh issue of shares up to Rs 250 crore and an offer for sale (OFS) of up to Rs 400 crore by promoter selling shareholders, Kollareddy Rama Raghava Reddy and Guntaka Ravindra Reddy, contributing Rs 360 crore and Rs 40 crore respectively. The company may also consider a pre-IPO placement of up to Rs 50 crore in specified securities, which could adjust the size of the fresh issue if completed.

The IPO aims to fund several strategic projects including Rs 127.05 crore allocated for phase-II development of the quartz grit and powder processing plant operated by its wholly owned subsidiary, Midwest Neostone. Additionally, Rs 25.75 crore will go towards purchasing electric dump trucks, and Rs 3.26 crore for integrating solar energy at certain mining sites to support the company’s sustainability efforts.

Further, Rs 53.80 crore from the IPO proceeds will be used to pre-pay or repay certain outstanding borrowings, enhancing the company’s financial health and operational flexibility.

Midwest Ltd., established in 1981, is recognized for its extensive experience and has grown to become India’s largest producer and exporter of Black Galaxy Granite (BGG), a premium variety of granite known for its unique aesthetics. It commands a significant 23% share of the Indian export market for BGG as per the latest CRISIL report and holds about 10.8% of the overall black granite production in India during Fiscal 2024.

In FY24, Midwest produced 57,519 cubic meters of BGG, exporting 48,249 cubic meters. The company operates 20 mines across various states in India, including Telangana, Andhra Pradesh, Karnataka, and Tamil Nadu, with plans for further expansion.

For fiscal 2024, Midwest reported a revenue increase of 16.54% to Rs.585.62 crore from Rs.502.52 crore in the previous fiscal year, driven by an increase in natural stone sales, scrap sales, and export incentives. The company’s profit after tax also saw a significant rise of 84.30% to Rs.100.32 crore, up fromRs.54.44 crore in Fiscal 2023.

The book-running lead managers for the IPO include DAM Capital Advisors Limited, Intensive Fiscal Services Private Limited, and Motilal Oswal Investment Advisors Limited, with KFin Technologies Limited serving as the registrar.

Midwest Limited, a Hyderabad-based company engaged in the exploration, mining, processing, and export of natural stones, has announced its plan to raise Rs 650 crore through an Initial Public Offering (IPO). The company, with over 40 years in the natural stone mining sector, filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI).The proposed IPO will consist of a fresh issue of shares up to Rs 250 crore and an offer for sale (OFS) of up to Rs 400 crore by promoter selling shareholders, Kollareddy Rama Raghava Reddy and Guntaka Ravindra Reddy, contributing Rs 360 crore and Rs 40 crore respectively. The company may also consider a pre-IPO placement of up to Rs 50 crore in specified securities, which could adjust the size of the fresh issue if completed.The IPO aims to fund several strategic projects including Rs 127.05 crore allocated for phase-II development of the quartz grit and powder processing plant operated by its wholly owned subsidiary, Midwest Neostone. Additionally, Rs 25.75 crore will go towards purchasing electric dump trucks, and Rs 3.26 crore for integrating solar energy at certain mining sites to support the company’s sustainability efforts.Further, Rs 53.80 crore from the IPO proceeds will be used to pre-pay or repay certain outstanding borrowings, enhancing the company’s financial health and operational flexibility.Midwest Ltd., established in 1981, is recognized for its extensive experience and has grown to become India’s largest producer and exporter of Black Galaxy Granite (BGG), a premium variety of granite known for its unique aesthetics. It commands a significant 23% share of the Indian export market for BGG as per the latest CRISIL report and holds about 10.8% of the overall black granite production in India during Fiscal 2024.In FY24, Midwest produced 57,519 cubic meters of BGG, exporting 48,249 cubic meters. The company operates 20 mines across various states in India, including Telangana, Andhra Pradesh, Karnataka, and Tamil Nadu, with plans for further expansion.For fiscal 2024, Midwest reported a revenue increase of 16.54% to Rs.585.62 crore from Rs.502.52 crore in the previous fiscal year, driven by an increase in natural stone sales, scrap sales, and export incentives. The company’s profit after tax also saw a significant rise of 84.30% to Rs.100.32 crore, up fromRs.54.44 crore in Fiscal 2023.The book-running lead managers for the IPO include DAM Capital Advisors Limited, Intensive Fiscal Services Private Limited, and Motilal Oswal Investment Advisors Limited, with KFin Technologies Limited serving as the registrar.

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