Midwest IPO Day 3: Oversubscribed nearly 22 times, Check GMP and other details; Should you apply?

Midwest’s Rs 451-crore initial public offering (IPO) has entered its third and final day of bidding today. The issue has witnessed strong investor interest, with subscriptions reaching 21.63 times. Investors have bid for 6.74 crore shares against the offer size of 31.17 lakh shares. The bulk of the demand has come from Qualified Institutional Buyers (QIBs), whose portion has been oversubscribed by a massive 68.34 times.

However, the grey market premium (GMP) has seen a slight decline — currently at 12.7%, down from 13.5% earlier, indicating a minor dip in investor sentiment. Even so, the GMP still sits comfortably above the IPO price of Rs 1,065 per share.

The IPO comprises a fresh issue worth Rs 250 crore and an offer for sale (OFS) of Rs 201 crore by existing shareholders. Share allotment is expected on October 20, with Midwest slated to list on both the BSE and NSE on October 24.

Midwest IPO Subscription Status

As of 11:15 AM on Day 3, the Midwest IPO has been subscribed 21.63 times overall, reflecting strong investor interest across all categories.

Retail Individual Investors (RIIs) have shown solid participation, subscribing 12.92 times their allocated quota. They collectively placed bids for approximately 15.53 lakh shares, well above their reserved portion, indicating strong confidence from small investors.

Non-Institutional Investors (NIIs), which include high-net-worth individuals, exhibited very strong demand, with their portion being oversubscribed 68.34 times. They bid for around 6.56 lakh shares, far exceeding the shares allocated to them.

Qualified Institutional Buyers (QIBs), such as mutual funds and insurance companies, have subscribed 1.92 times their allocation of 8.87 lakh shares, showing steady but more measured interest compared to NIIs.

Midwest IPO GMP Update: Positive Market Sentiment

The grey market premium (GMP) for the Midwest IPO currently stands at around 12.7% above the issue price of Rs 1,065 per share. This points to a potential listing price close to Rs 1,200, indicating strong investor enthusiasm and an optimistic market outlook ahead of the stock’s official debut.

Midwest IPO Snapshot

The IPO price band is set between Rs 1,014 and Rs 1,065 per share. Investors can apply for a minimum of one lot (14 shares), amounting to Rs 14,910 at the upper end. Retail investors may apply for up to 13 lots (182 shares), with a maximum investment of approximately Rs 1.94 lakh.

DAM Capital Advisors is acting as the book-running lead manager, while KFin Technologies is the registrar for the issue.

Strong Fundamentals and Global Presence

Midwest operates across the value chain—exploration, mining, processing, marketing, and export—of granite and other natural stones. It is best known for Black Galaxy Granite, a globally recognized variety known for its distinctive golden shimmer.

The company manages 16 granite mines across Telangana and Andhra Pradesh, supported by two large-scale processing units—one in each state.

Midwest exports its products to 17 countries across five continents, with major markets including China, Italy, and Thailand. Its global clientele includes prominent names such as GI-MA Stone (Italy), MP STENEKO AB (Sweden), and The Xiamen Group (China).

Financial Highlights

Midwest has reported consistent financial growth. In FY25, revenue rose by 7% to Rs 643 crore, while profit after tax jumped 33% to Rs 133 crore.

The company maintains a healthy balance sheet, with a conservative debt-to-equity ratio of 0.43 and a net worth of Rs 554 crore. Based on the upper end of the price band, Midwest’s market capitalization is pegged at around Rs 3,851 crore.

Planned Use of IPO Proceeds

The funds raised through the IPO will primarily support expansion initiatives. A key portion is earmarked for Midwest’s wholly owned subsidiary, Midwest Neostone, to develop Phase II of its Quartz Processing Plant.

Additional funds will be used to purchase electric dump trucks to improve sustainability, install solar power systems at select mine sites, and prepay a portion of existing debt.

Should You Subscribe to the Midwest IPO?

SBI Securities highlights Midwest as India’s largest producer and exporter of Black Galaxy Granite, with strong financial growth: revenue, EBITDA, and PAT grew at a CAGR of 11.6%, 38.5%, and 40.5% respectively between FY23 and FY25.

At the upper price band of Rs 1,065, the IPO is valued at a FY25 P/E of 35.8x and EV/EBITDA of 22.4x. Despite strong returns (RoE: 17.4%, RoCE: 19.1%), the issue appears priced at a premium versus peers. SBI Securities gives a NEUTRAL rating, advising investors to wait and watch post-listing.

BP Equities, on the other hand, is more optimistic. Backed by strong fundamentals, rising global demand, and expansion plans, Midwest is seen as well-positioned for future growth. With FY25 P/E at a more reasonable 27.0x (based on projections), BP Equities gives the IPO a SUBSCRIBE rating.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)