Midwest Limited Makes Strong Debut with 9.50% Premium, Lists at ₹1,166.20 Against Exceptional Subscription

Midwest Limited, India's largest producer of Absolute Black Granite and Black Galaxy Granite, made a strong debut on BSE and NSE on October 24, 2025. After closing its IPO bidding between October 15-17, 2025, the company commenced trading with a 9.40% premium opening at ₹1,165.10 and rose to ₹1,166.20 with gains of 9.50%, reflecting positive investor sentiment towards the natural stones sector backed by exceptional subscription response of 92.36 times and substantial anchor backing of ₹135 crore.

Midwest Limited Listing Details

Midwest Limited launched its IPO at ₹1,065 per share with a minimum investment of 14 shares costing ₹14,910. The IPO received exceptional response with a subscription of 92.36 times - retail investors at 25.52 times, QIB at 146.99 times, and NII at 176.57 times.

First-Day Trading Performance Outlook

Listing Price: Midwest share price opened at ₹1,165.10 representing a premium of 9.40% from the issue price of ₹1,065, and rose to ₹1,166.20, delivering strong gains of 9.50% for investors reflecting positive market sentiment towards the natural stones sector.

Growth Drivers and Challenges

Growth Drivers:

• Virtual Monopoly Position: India's largest producer of Absolute Black Granite and Black Galaxy Granite (unique granite with sparkling golden flakes), 16 granite mines across 6 locations in Telangana and Andhra Pradesh, two processing facilities enabling large-scale operations.
• Strong Global Presence: Exports to 17 countries across five continents with approximately 70% export earnings, key markets including China, Italy, and Thailand, serving prestigious customers like MP STENEKO AB (Sweden), GI-MA STONE SRL (Italy), Quanzhou Xingguang Stone, The Xiamen Group (China), and King Marble (Thailand).

Challenges:

• Aggressive Valuation Metrics: Post-issue P/E of 39.49x appearing aggressively priced despite the virtual monopoly position, price-to-book value of 6.50x requiring sustained performance to justify premium valuations in the natural stones segment.
• Geographic Concentration: Operations concentrated in Southern India (Telangana, Andhra Pradesh), elevated debt-to-equity ratio of 0.43 post fresh capital raising, and dependence on export markets (70% revenue) creating currency fluctuation risks and geopolitical exposure.

Utilisation of IPO Proceeds

• Subsidiary Investment: ₹130.30 crore investment in wholly owned subsidiary Midwest Neostone as loan for Phase II Quartz Processing Plant capital expenditure, diversifying beyond granite into quartz segment.
• Capacity Enhancement and Sustainability: ₹25.76 crore for purchase of Electric Dump Trucks for the company and material subsidiary APGM promoting environmental sustainability, and ₹3.26 crore for integration of solar energy at certain mines reducing carbon footprint.
• Debt Reduction: ₹56.22 crore for prepayment or repayment of certain outstanding borrowings of the company and APGM, improving financial leverage from the 0.43x debt-to-equity ratio, plus ₹9.08 crore for general corporate purposes.

Offer for Sale: ₹201 crore through offer for sale of 18.87 lakh shares by promoters, monetizing stake while maintaining substantial 84.39% holding post-IPO.

Financial Performance of Midwest Limited

Revenue: ₹643.14 crore for FY25, showing modest growth of 7% from ₹603.33 crore in FY24, reflecting steady demand for Black Galaxy, Absolute Black, and Tan Brown granite varieties in global markets.

Net Profit: ₹133.30 crore in FY25, representing impressive growth of 33% from ₹100.32 crore in FY24, demonstrating strong operational leverage and improving profitability trajectory in the natural stones business.

Financial Metrics: Solid ROE of 19.42%, strong ROCE of 18.84%, moderate debt-to-equity ratio of 0.43, healthy PAT margin of 17.17%, solid EBITDA margin of 27.43%, price-to-book value of 6.50x, and an estimated market capitalisation of ₹4,217.07 crore (significantly higher than the pre-listing estimate of ₹3,851.02 crore due to the 9.50% premium).