Midwest IPO: Mining and Exploration Company's Public Issue Opens For Subscription - Know Key Details From RHP

Midwest IPO GMP: The Midwest IPO opened for subscription on October 15. The mining and exploration company's public issue will close for subscription on October 17.

On the first day of subscription, the company's grey market premium witnessed a significant jump. Here's a look at some of the key details of the mining company's peers, financials, strengths and risks before it opens for subscription:

Midwest IPO GMP

Midwest IPO GMP is ranging between Rs 130 to Rs 145 per share on October 15 according to multiple websites which monitor the movement of unlisted shares on the grey market. Based on the premium, shares of the mining and exploration company can list at Rs 1,210 apiece with potential listing gains of 13.65 per cent.

Midwest IPO: Offer Size, Listing Date, Price Band 

Midwest IPO offer size aggregates to Rs 451 crore. The issue consists of a fresh issuance of 2.3 million shares amounting to Rs 250 crore and an offer for sale of 1.9 million shares aggregating to Rs 201 crore.

Midwest IPO price band has been fixed at Rs 1014 to Rs 1065 per share. The minimum lot size to apply for Midwest IPO for retail investors has been set at 1 lot consisting of 14 shares aggregating to a minimum investment of Rs 14,910.

Midwest IPO basis of allotment is expected to be determined on October 20. Once the share allotment status of Midwest IPO is decided, successful bidders will receive shares of Midwest in their demat accounts on October 23. Midwest shares are slated to list on the BSE and NSE. Midwest IPO listing date is October 24.

Midwest IPO Subscription Update

Midwest IPO saw strong demand on the first day of subscription. The mining company's public issue was subscribed 48 per cent soon after the opening of the subscription window. Investors across categories applied for 14,98,042 shares compared to the 31,17,460 shares offered as a part of the public issue.

Employees of the mining company booked the issue 1.14 times by bidding for 12,474 shares compared to the 10,952 shares offered for subscription. Midwest IPO subscribed 60 per cent in the retail category as retail investors placed bids for 9,34,682 shares compared to the 15,53,255 shares reserved for the category.

Non-institutional investors subscribed their quota 83 per cent by applying for 5,50,886 shares compared to the 6,65,681 shares set aside for the category. Qualified institutional buyers have not placed any bids so far, Midwest Ltd has set aside 8,87,572 shares for the category.

Midwest: Key Financials

Midwest Ltd's total income for the June quarter of FY25 stood at Rs 146.47 crore, the company's profit-after-tax stood at Rs 24.38 crore, and the company's net worth stood at Rs 577.03 crore.

Midwest's total income increased by over 6 per cent to Rs 643.14 crore in the financial year ended March 31, 2025, compared to Rs 603.33 crore in the preceding fiscal. The company's profit-after-tax for FY 2024-25 stood at Rs 133.3 crore, increasing by over 32 per cent compared to a net profit of Rs 100.32 crore in FY 2023-24. The net worth of Midwest Ltd increased by over 31 per cent to Rs 553.69 crore in FY 2024-25 from Rs 421.93 crore in the preceding fiscal.

Midwest: Business Model

Midwest Ltd operates in the dimensional natural stone industry. The company's business operations include exploration,  development  and  operation  of  mines,  stone  processing  and  fabrication,  sales, distribution and marketing of various types of natural stones. The company is the largest producer and exporter of black galaxy granite and the largest producer of absolute black granite. The company also benefits from being an organised player in the otherwise unorganised natural stone mining industry.

Midwest: Competitors

Midwest Ltd competes with other small, medium and large enterprises which operate in the granite and quartz production industry. According to Midwest Ltd's RHP some of its key competitors include Pokarna Ltd, Aro Granite Industries Ltd and HMG Granites Ltd.

Midwest IPO: Risks and Strengths

Midwest's business faces these risks as per the company's RHP:

• The company disclosed in its prospectus that its estimates of natural stone reserves may be materially different from the quantity and quality of natural stones which are recovered from its mines. The company also mentioned that market price fluctuations and changes in operating and capital costs may render its natural stone reserves uneconomical to extract.

• Midwest mentioned in its RHP that it has entered into and proposes to enter into new business segments. However the inability to establish itself in such nascent business segments can adversely affect its business condition, results of operations and cash flows.

• The company also disclosed that a significant part of its revenue comes from China. In the three-month period ended June 30, 2025, Fiscals 2024 and 2023, over 50 per cent of the company's revenue came from customers located in  China. Thus, adverse developments in the Chinese market can adversely affect the company's business and results of operations.

Here's a look at some of the key strengths of Midwest according to the company's RHP:

• Midwest mentioned in its RHP that the natural stone processing industry has high barriers to entry for new players. Additionally, the company's old mining rights and entrenched operations give it a significant advantage in the industry.

• Midwest claimed in it RHP that it can offer superior pricing positioning due to its substantial market share and a historical trend wherein the demand for natural stones has far surpassed supply consistently.

• Midwest also mentioned that it has a strong distribution network, supported by long-term contracts and interest-free advances secured against raw material supply. The sale of materials in different territories is through distributors.

Midwest IPO: Objective

Midwest Ltd plans to use the funds raised via the public issue to fund capital expenditures such as the purchase of electric dump trucks, the integration of solar energy at certain mines, and other costs related to the company's Phase II quartz processing plant. The proceeds will also be used to repay the company's outstanding borrowings and for general corporate purposes.