Among brokerages, SBI Securities has maintained a neutral view on the issue and would like to monitor the performance of the company post listing.
At the upper price band of ₹1,065, the IPO is valued at FY25 P/E and EV/EBITDA multiple of 35.8x and 22.4x, respectively on post issue capital.Despite being a capital-intensive business, the company generates RoE/RoCE of 17.4%/19.1%, respectively. However, while comparing with peer, the issue is valued at a premium, the brokerage said.
Adding a ‘Subscribe’ rating to the issue, Ventura said the company has a robust operational footprint with 20 mining leases and five processing units across India.
As of FY25, Midwest’s revenue from natural stone sales accounted for 96% of the total revenue, while the secondary segments, including diamond wires and processed stones, contributed to the remaining 4%.
Midwest has demonstrated significant growth, with its revenue increasing from ₹502 crore in FY22 to ₹626 crore in FY25, reflecting a CAGR of 12%.The company is selling its shares in a fixed range of ₹1,014-1,065 apiece for which bids can be made for a minimum of 14 equity shares and its multiples thereafter.
The company is aiming to raise ₹451 crore via the issuewhich includes a fresh share sale of ₹250 crore and an offer-for-sale (OFS) of up to ₹201 crore.
Proceeds from the issue will be utilised towards funding capex for the company and its subsidiary, repayment of loans and general corporate purposes.
Midwest is engaged in the business of exploration, mining, processing, marketing, distribution and export of natural stones. Midwest is India’s largest producer and exporter of Black Galaxy Granite.
The company has 20 operational Mines, comprising 16 Granite Mines, 3 Quartz Mines and 1 Marble Mine, and a resource base across the Indian states of Telangana, Andhra Pradesh, Karnataka and Tamil Nadu.
Dam Capital Advisors, Intensive Fiscal Services and Motilal Oswal Investment Advisors are the book running lead managers and Kfin Technologies is the registrar of the issue.
The allotment for the Midwest IPO is expected to be finalised on October 20, while the IPO will be listed on BSE and NSE with a tentative listing date fixed as October 24.
