IPO Details
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Schedule of Midwest Ltd
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Issue Highlights
Initial public offering of up to [] equity shares of face value of Rs.5 each (equity shares) of midwest limited (the company or the company or the issuer) for cash at a price of Rs.[] per equity share (including a premium of Rs.[] per equity share) (the offer price) aggregating up to Rs.650.00 crores (the offer) comprising a fresh issue of up to [] equity shares aggregating up to Rs.250.00 crores by the company (the fresh issue) and an offer for sale of up to [] equity shares aggregating up to Rs.400.00 crores comprising an offer for sale of up to [] equity shares aggregating up to Rs.360.00 crores by Mr. Kollareddy Rama Raghava reddy (promoter selling shareholder) and an offer for sale of up to [] equity shares aggregating up to Rs.40.00 crores by Mr. Guntaka Ravindra Reddy (the promoter group selling shareholder, and together with the promoter selling shareholder, Referred to as the selling shareholders, and each individually, as a selling shareholder and such offer for sale of equity shares by the selling shareholders, the offer for sale). This offer includes a reservation of up to [] equity shares, aggregating up to Rs.[] crores (constituting up to 5% of the post-offer paid-up equity share capital), for subscription by eligible employees (as defined hereinafter) (employee reservation portion). The offer less the employee reservation portion is hereinafter referred to as the net offer. the company in consultation with the brlms, may offer a discount of up to Rs.[] to the offer price (equivalent of Rs.[] per equity share) to eligible employees bidding in the employee reservation portion (employee discount). the offer and the net offer shall constitute []% and []%, respectively, of the post-offer paid-up equity share capital of the company. The company may, in consultation with the brlms, consider a further issue of specified securities for cash consideration aggregating up to Rs.50.00 crores, prior to filing of the red herring prospectus with the registrar of companies, telangana at hyderabad (roc, and such further issue, the pre-ipo placement). The price of the specified securities allotted pursuant to the pre-ipo placement shall be determined by the company, in consultation with the book running lead managers (brlms). Prior to the completion of the offer and if the pre-ipo placement is undertaken, the company shall appropriately intimate the subscribers to the pre-ipo placement, prior to allotment pursuant to the pre-ipo placement, that there is no guarantee that the company may proceed with the offer or the offer may be successful and will result in listing of the equity shares on the stock exchanges. further, relevant disclosures in relation to such intimation to the subscribers to the pre-ipo placement (if undertaken) shall be appropriately made in the relevant sections of the rhp and prospectus. if the pre-ipo placement is completed, the amount raised pursuant to the pre-ipo placement will be reduced from the fresh issue, subject to compliance with rule 19(2)(b) of the securities contracts (regulation) rules, 1957, as amended (the scrr). the pre-ipo placement shall not exceed 20% of the size of the fresh issue. The face value of the equity shares is Rs.5 each and the offer price is [] times the face value of the equity shares. The price band (including employee discount, if any) and the minimum bid lot will be decided by the company in consultation with the brlms.
About Midwest Ltd IPO
The IPO of Midwest Ltd is a 100% book-built issue comprising a fresh issue and an offer for sale. While the fresh issue size aggregates up to ₹250 crore, the offer for sale is pegged at ₹400 crore. The total issue size of the offer aggregates up to ₹650 crore.
Objectives of Midwest Ltd IPO
The company plans to utilise the proceeds received from the IPO to:
- Fund capital expenditure by Midwest Neostone Private Limited, the wholly-owned subsidiary of Midwest Ltd, towards Phase II of the quartz grit and powder processing plant
- Meet capital expenditure for purchase of electric dump trucks to be used by the company and Andhra Pradesh Granite (Midwest) Private Limited (APGM), its material subsidiary
- Fund capital expenditure for integration of solar energy at certain mines of the company
- Pre-pay/re-pay, in part or full, certain outstanding borrowings of the company and APGM
- Meet general corporate purposes
Midwest Ltd IPO Valuation
| Detail | Information |
|---|---|
Upper Price Band | TBA |
Fresh Issue Size | Up to ₹250 crore |
Offer For Sale | Up to ₹400 crore |
EPS in ₹ for FY 24 | 29.67 |
Midwest Ltd Share Offer and Subscription Details
| Investor Category | Shares Offered |
|---|---|
QIBs | Not more than 50% of the offer |
Non-institutional Bidders | Not less than 15% of the offer |
Retail Individual Bidders | Not less than 35% of the offer |
Industry Outlook
As per IBM, the total granite resources in India stood at an estimated 46,320 million cubic meters as on April 1, 2015. Granite production is projected to grow to 24,366-25,537 KT in fiscal 2029, logging a CAGR of 6-7% between fiscal 2024 and 2029. The production is expected to be driven by increased domestic demand as well as exports of granite.
Company Information
Midwest Ltd has a legacy of more than four decades in the dimensional natural stone (i.e., naturally occurring stones) industry with experience in exploration, development and operation of mines, stone processing and fabrication, sales, distribution and marketing of various types of natural stones.
Risks of Midwest Ltd IPO
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The company’s estimates of natural stone reserves in its mines may be materially different from the quantity and quality of natural stone that may actually be recovered from such mines. Further, its estimates of mine life, i.e., the operational lifespan of a mine, may prove to be inaccurate and market price fluctuations and changes in operating and capital costs may render certain or all of its natural stone reserves uneconomical to exploit.
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There are outstanding legal proceedings involving their company, their subsidiaries, their directors and promoters. Any adverse outcome in such proceedings may adversely affect their reputation, business, results of operations, cash flows and financial condition.
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The company derives a substantial portion of their revenue from the sale of Black Galaxy Granite (72.35%, 70.46% and 71.91% in Fiscals 2024, 2023 and 2022, respectively), which is produced from three Mines located in Chimakurthy, Andhra Pradesh. The disruption of production at their Black Galaxy Granite Mines or reduction in demand for Black Galaxy Granite could adversely affect their business, financial condition, results of operations and cash flows.
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The company derives a significant portion of its revenue from operations from outside India and during Fiscals 2024 and 2023, more than 50% of its revenue from operations was derived from customers located in China, which acts as a global distribution hub for the Granite industry. Any adverse developments in these markets or an inability of China to continue to act as a hub to cater to the global demands, could adversely affect its business and results of operations.
Midwest Ltd Financials
Particulars (in Rs. crores)
Particulars (in Rs. crores)
Peer Comparison
| Parameter for FY 24 | Midwest Ltd | Pokarna Ltd |
|---|---|---|
Revenue from Operations (in ₹ crore) | 585.624 | 687.614 |
P/E | NA | 39.05 |
Return on Net Worth (in %) | 22.88 | 14.75 |
EPS in ₹ | 29.67 | 28.18 |
IPO Registrar and Book Running Lead Managers
KFin Technologies Ltd is the registrar of Midwest Ltd IPO. The book running lead managers are:
- DAM Capital Advisors Ltd
- Intensive Fiscal Services Pvt Ltd
- Motilal Oswal Investment Advisors Ltd
Business Model
Midwest Ltd is engaged in the business of exploration, mining, processing, marketing, distribution and export of natural stones. Its existing business activities primarily comprise extracting and processing dimensional granite, particularly the Black Galaxy and Absolute Black varieties.
In addition to its natural stone business, the company also manufactures Diamond Wire, which is a precision cutting tool employed in the natural stone and construction industries to size stones and other hard substances with precision in mines and processing/ fabrication facilities.
Company Growth Trajectory
The company has a proven track record of strong financial and operational performance, which positions it well for growth and diversification. Between Fiscal 2022 and 2024, its revenue from operations, EBITDA and profit after tax grew at a CAGR of 5.59%, 19.67% and 18.55%, respectively.
Market Position
With a legacy of more than four decades, Midwest Ltd is India’s largest producer and exporter of Black Galaxy Granite. It held a share of approximately 23% of the Indian export market for Black Galaxy Granite in Fiscal 2024 exporting 48,249 cubic meters of Black Galaxy Granite during Fiscal 2024.
Midwest Ltd Profit and Loss
| Parameter | FY 24 | FY 23 | FY 22 |
|---|---|---|---|
Total Income (in ₹ crore) | 603.330 | 522.233 | 539.483 |
Profit Before Tax (in ₹ crore) | 137.805 | 78.699 | 93.301 |
Profit After Tax (in ₹ crore) | 100.324 | 54.436 | 67.093 |
EBITDA (in ₹ crore) | 151.443 | 89.587 | 105.741 |
EPS in ₹ | 29.67 | 16.10 | 19.84 |
Midwest Ltd Cash Flow Statement
| Parameter | FY 24 | FY 23 | FY 22 |
|---|---|---|---|
Profit Before Tax (in ₹ crore) | 137.805 | 78.699 | 93.301 |
Net Cash Generated/ Used from/ in Operating Activities (in ₹ crore) | 127.907 | 51.946 | 143.312 |
Net Cash Flow used in investing Activities (in ₹ crore) | 63.589 | 17.459 | 98.843 |
Net Cash Generated/ used in Financing Activities (in ₹ crore) | 49.876 | 44.811 | 13.687 |
Cash and Cash Equivalents at the End of the Period (in ₹ crore) | 25.458 | 11.016 | 35.610 |
How to Check Allotment Status of Midwest Ltd IPO?
You can check the allotment status of Midwest Ltd IPO through the BSE website or through the registrar portal. To check status on BSE website:
- Visit the BSE website
- Click on “Investor Services” and choose “Application Status Check”
- Choose the issue type — Equity or Debt
- Select the Issue Name from the drop-down.
- Enter your application number or PAN number
- Check the box that says “I’m not a Robot” and click on “Search” to know the allotment status
To check the status on the registrar’s portal:
- Visit the website of KFin Technologies Ltd
- Choose IPO allotment status from “Products’ dropdown
- Click on any of the links
- Select the IPO
- Input either your application number, PAN number or Demat number
- Enter captcha and click on Submit
How to Apply for Midwest Ltd IPO?
To apply for Midwest Ltd IPO:
- Step 1: Log in to your Kotak Securities Demat account: Log in to your Demat account to access IPO investments. Next, select the current IPO section.
- Step 2: Specify IPO details: Enter the number of lots and the price you wish to apply for.
- Step 3: Enter UPI ID After entering your UPI ID, click submit. This will place your bid with the exchange.
- Step 4: Mandate Notification: Your UPI app will receive a mandate notification to block funds.
- Step 5: Approve Request Your funds will be blocked once you approve the mandate request on your UPI.
Midwest Ltd IPO FAQs
What is the Midwest Ltd IPO?
The Midwest Ltd IPO is a 100% book-built issue comprising a fresh issue and an offer for sale. The fresh issue size is pegged at ₹250 crore while the offer for sale aggregates up to ₹400 crore.
What are the bidding dates of Midwest Ltd IPO?
The bidding dates of the IPO are yet to be announced.
From where can I read more about Midwest Ltd IPO?
You can read more about Midwest Ltd and its IPO from the draft red herring prospectus here: (SEBI | Midwest Ltd DRHP)
