The biggest manufacturer and exporter of black galaxy granite, Midwest, has filed preliminary documents for the IPO launch with regulator SEBI and has decided to raise Rs 650 crore through the capital markets.
Total size and structure
According to the draft papers, the company intends to raise Rs 400 crore through an offer-for-sale and Rs 250 crore through a fresh issue.
The offer-for-sale will be used by promoters Kollareddy Rama Raghava Reddy and Guntaka Ravindra Reddy to sell their respective holdings of Rs 40 crore and Rs 360 crore.
Pre-IPO placement
Furthermore, it may also consider the issue of equity shares worth Rs 50 crore via private placement.
Should it be successful in raising capital through pre-IPO placement, the aforementioned sum will be subtracted from its new issue.
Share holding pattern
95.83 per cent of the company is owned by its promoters, and 4.17 per cent is owned by investor Svadha India Emerging Opportunities Scheme 1, a SEBI-registered AIF (category II).
Svadha India purchased 14,08,851 equity shares (4.17 per cent) at a cost of Rs 709.80 per share on September 28, 2024, making an investment of Rs 100 crore in the natural stone mining company. The company's valuation is Rs 2,400 crore at the same price.
IPO's net proceed use
Of the net fresh issue proceeds, the Hyderabad-based company will use Rs 156 crore for capital expenditures related to the Phase II Quartz processing plant, the acquisition of electric dump trucks, and the integration of solar energy at specific mines.
Additionally, Rs 53.8 crore will go towards debt repayment, with the remaining money going toward general corporate needs. As of August 2024, its total outstanding debt was Rs 150.4 crore.
Company offerings
The company produces black galaxy granite and absolute black granite slabs and dimensional blocks from its 16 active granite mines in Andhra Pradesh and Telangana. While absolute black granite is widely used in temples, monuments, and memorials, black galaxy granite is used in real estate projects.
