Midwest IPO Day 2 Updates: Issue subscribed 11.73x so far. GMP hints over 16% listing pop.Check review, key details

Midwest IPO subscription status was 11.73 times on day 2. The retail portion was subscribed 8.19 times, and NII portion has been booked 33.20 times, Qualified Institutional Buyers (QIBs) portion received 1.84 times bids. Employee portion subscribed 9.12 times.

The company has received bids for 3,65,58,438 shares against 31,17,460 shares on offer, at 17:00 IST, according to data on BSE.

Its customer base includes processors and distributors across 17 countries and five continents, with long-standing relationships and long-term contracts highlighting the company's strong market presence and reliability.

The company operates a well-established global distribution network, serving markets in North America, South America, Europe, Africa, and Asia. With an increasing share of its revenue coming from international markets, Midwest is poised for further expansion in the global natural stone market.

The company has a robust operational footprint with 20 mining leases and 5 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%

1. Dispute with BEML Ltd and outstanding litigations
2. Regulatory risk
3. Customer concentration
4. Export risk

1. The company’s estimates of natural stone reserves across its mines may differ materially from the actual quantity and quality of stone that can be recovered. Additionally, estimates of the operational lifespan of mines may prove inaccurate. Fluctuations in market prices and changes in operating and capital costs may render certain or all of the natural stone reserves uneconomical to mine.
2. The company’s operations are subject to regulation, requiring it to obtain, renew, and maintain statutory and regulatory approvals. Any delays or inability to secure or renew such approvals due to litigation or changes in the regulatory landscape could adversely impact business expansion and affect operational performance.

1. Quartz
2. Heavy Mineral Sand Mining
3. Laza Grey Marble and Celestia Quartzite

• ₹130.30 crore loan to Midwest Neostone for Phase II Quartz Plant capex

• ₹25.76 crore towards Electric Dump Truck capex — for company use and as a loan to APGM, material subsidiary

• ₹3.26 crore for solar integration at select mines.

• ₹56.22 crore for partial prepayment of borrowings (Company and APGM via loan), and remaining funds for

• General corporate purposes.

1. Capitalize on the growing market for Black Galaxy Granite and Absolute Black Granite and build resource base
2. Expand Dimensional Stone products and enter new geographies
3. Diversify revenue through production of Quartz grit and powder
4. Expand into heavy mineral sand mining
5. Growing and augmenting operations in Diamond Wire Segment

With an intent to diversify its existing business, Midwest is expanding into the Quartz, Laza Grey Marble, Celestia Quartzite and Heavy Mineral Sand Mining businesses. During Nov’20, the company secured and developed 2 Quartz mines in Andhra Pradesh which are now ready for extraction.

Further, Midwest is developing 3 additional Quartz mines in Andhra Pradesh and is establishing a Quartz processing plant (6,06,600 MTPA capacity in 2 phases), aimed for processing value-added high purity Quartz products (grit and powder).

Midwest IPO subscription status was 5.21 times on day 2. The retail portion was subscribed 4.40 times, and NII portion has been booked 13.57 times, Qualified Institutional Buyers (QIBs) portion received 54% bids. Employee portion subscribed 5.51 times.

The company has received bids for 1,64,16,344 shares against 31,17,460 shares on offer, at 12:21 IST, according to data on BSE.

1. High Entry Barriers and Long Timelines Benefit Established Players
2. Emphasis on Innovation and Technological Advancement
3. India's Top Exporter of Black Galaxy Granite

“With 40+ years in natural stone, the company leads India’s Black Galaxy Granite export market (64%) with 44,992 cu.m. exported in FY25 and dominates Absolute Black Granite production (15.7% of black granite output). EBITDA and PAT have grown steadily. Despite a 2015 CBI notice involving promoter Mr. Kollareddy and a higher PE of 27x vs peers’ 12x, profit margins remain strong. With near-monopoly status, it is recommended to “SUBSCRIBE” for long-term, higher-risk investors,” said Canara Bank Securities.

Backward integration to support the development of environmentally friendly diamond tools such as Diamond wire used in the cutting and processing of hard materials, for captive as well as industry consumption through manufacturing facility in Hyderabad. It aims to increase operations in the Diamond Wire Segment and acquire a greater share of the market for this product and R&D focus on cutting speed and useful-life enhancements by modifying the composition Materials like tungsten, iron, cobalt, and synthetic diamonds.

1. India’s largest black galaxy granite producer, with a sustainable competitive edge, driven by a long gestation period.
2. Leveraging end-to-end dimensional granite integration to capture growth opportunities.

Midwest Ltd. is India’s largest producer and exporter of Black Galaxy Granite, with a legacy of over four decades in the dimensional natural stone industry. The company has experience in exploration, development, and operation of mines, stone processing and fabrication, sales, distribution, and marketing of various natural stone varieties.

In FY25, Midwest held approximately 64% of the Indian export market for Black Galaxy Granite, exporting 44,992 cubic meters. Besides Black Galaxy Granite, Midwest is also one of the largest producers of Absolute Black Granite in India, accounting for 15.7% of the country's total black granite production in FY25.

Midwest operates 16 granite mines across six locations in Telangana and Andhra Pradesh, producing varieties such as Black Galaxy, Absolute Black, and Tan Brown granite. It maintains granite processing facilities in both Telangana and Andhra Pradesh. Additionally, the company has established a resource base comprising 25 locations across Andhra Pradesh, Telangana, Karnataka, and Tamil Nadu.

1. Discrepancy in estimate of quality and quantity of natural stone reserves in mines may impact the business.
2. Significant dependence of revenue on China as it acts as distribution hub for granite industry.
3. Disruption of production at black galaxy granite mines as this segment has major revenue dependence.

“At the upper end of the price band, the issue is valued at a P/E of 30x, which seems to be priced aggressively. However, the company’s diversification into quartz and HMS segments positions it to tap into high-growth industries such as solar glass, electric vehicles (EVs), aerospace, and semiconductors. This strategic shift aligns well with India’s push for self-reliance and comes at a pivotal time amid global supply chain disruptions. We believe these new verticals will make a meaningful contribution to the company’s revenue and enhance profitability over time. We recommend “SUBSCRIBE FOR LONG-TERM” to the issue,” said Aditya Birla Capital.

The company intends to raise ₹250 crore by issuing new shares, while promoters - Kollareddy Rama Raghava Reddy and Guntaka Ravindra Reddy - will be offering shares worth up to ₹201 crore through an offer-for-sale.

The initial size of the IPO has been decreased from ₹650 crore as the company has adjusted its offer-for-sale amount to ₹201 crore from the previously announced ₹400 crore.

Quartz Processor Midwest, acknowledged as the top producer of Black Galaxy and Absolute Black granite in India, secured ₹135 crore from anchor investors prior to its initial public offering on October 14.

Prominent institutions involved in the anchor investment consist of Goldman Sachs Funds, particularly the Goldman Sachs India Equity Portfolio, along with Edelweiss Life Insurance Company.

Tentatively, Midwest IPO basis of allotment of shares will be finalised on Monday, October 20 and the company will initiate refunds on Thursday, October 23, while the shares will be credited to the demat account of allottees on the same day following refund. Midwest share price is likely to be listed on BSE and NSE on Friday, October 24.

Midwest IPO GMP today is ₹175.5. This indicates Midwest share price is trading at a premium of ₹175.5 in the grey market on Thursday, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Midwest share price was indicated at ₹1,240.5 apiece, which is 16.48% higher than the IPO price of ₹1,065.

According to the grey market activities over the last seven sessions, today’s IPO GMP shows an upward trend and is anticipated to have a robust listing. The minimum GMP recorded is ₹0.00, whereas the maximum GMP stands at ₹175.50, as per experts.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

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.