Borana Weaves IPO Day 2: GMP, subscription status to review. Apply or not?

Borana Weaves IPO: The initial public offering (IPO) of Borana Weaves received stellar response and got heavily oversubscribed on the first day. Borana Weaves IPO entered its second day of bidding today, May 21.

Borana Weaves is a manufacturer of unbleached synthetic grey fabric. The Gujarat-based company also manufactures polyester textured yarn.

Borana Weaves IPO was subscribed 8.53 times in total on May 20, the first day of the bidding process. The public issue was subscribed 24.96 times in the retail category, 1.55 times in the Qualified Institutional Buyers (QIBs) category, and 11.54 times in the Non Institutional Investors (NII) category, NSE data showed.

With the robust subscription received on the first day of the bidding, investors weigh on several factors to apply for the Borana Weaves IPO. Here’s what analysts recommend on Borana Weaves IPO:

Should you apply for Borana Weaves IPO?

“Borana Weaves IPO offers a compelling short-term opportunity, with strong listing gain potential driven by robust growth, healthy margins, and attractive GMP (grey market premium). The company’s niche positioning and integrated manufacturing give it an edge, but high regional concentration and raw material volatility remain key risks.,” said Gaurav Garg, Lemonn Markets Desk.

At a P/E of ~17.5x, valuations seem fair, making it a suitable pick for retail and HNI investors looking to capitalize on debut momentum — while long-term investors may want to monitor execution and expansion before committing, Garg added.

For the last three fiscals, Borana Weaves has posted an average EPS of ₹8.77 (simple average) and an average RoNW of 64%. The issue is priced at a P/BV of 5.63 based on its NAV of ₹38.40 as of December 31, 2024, and at a P/BV of 2.60 based on its post-IPO NAV of ₹83.11 per share (at the upper cap), according to Bajaj Broking.

“If we attribute FY25 annualized super earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 14.73. Based on FY24 earnings, the P/E stands at 24.41. Thus, the issue is fully priced,” said the broking house.

It recommends subscribing to Borana Weaves IPO for the long term.

Borana Weaves IPO GMP

Borana Weaves shares are commanding a decent traction in the unlisted market with a strong grey market premium (GMP). According to stock market observers, Borana Weaves IPO GMP today is ₹56 per share. This means that in the grey market, Borana Weaves shares are trading higher by ₹56 than their issue price.

Considering Borana Weaves IPO GMP today, the equity shares are trading at ₹272 apiece in the grey market, a premium of 25.93% to the IPO price of ₹216 per share.

Borana Weaves IPO Details

Borana Weaves IPO opened for public subscription on Tuesday, May 20, and will close on Thursday, May 22. The IPO allotment is expected to be finalized on May 23, and Borana Weaves IPO listing date is expected to be on May 27. The equity shares of Borana Weaves will be listed on BSE and NSE.

Borana Weaves IPO price band is set at ₹216 per share. The company plans to raise ₹144.89 crore from the IPO which is entirely a fresh issue of 67.08 lakh equity shares.

The IPO lot size is 69 shares and the minimum investment amount required by retail investors is ₹14,145.

Beeline Capital Advisors Pvt Ltd is the book-running lead manager of the Borana Weaves IPO, while Kfin Technologies is the IPO registrar.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.