Upcoming IPO! Black galaxy granite player, Midwest files DRHP with Sebi

With the IPO, Midwest is offering a fresh issue of shares up to Rs 250 crore and an offer for sale (OFS) of up to Rs 400 crore

Upcoming IPO Alert! Leading Black Galaxy Granite producer, Midwest, is all set to go public as the company has filed its draft red herring prospectus (DRHP) with the market regulator, Securities and Exchange Board of India (SEBI), to raise Rs 650 crore through an initial public offering (IPO).

With this issue, Midwest is offering a fresh issue of shares up to Rs 250 crore and an offer for sale (OFS) of up to Rs 400 crore by promoter offlaoding their stakes. The offer for sale consists of up to Rs 360 crore by Kollareddy Rama Raghava Reddy, and up to Rs 40 crore by Guntaka Ravindra Reddy.

DAM Capital Advisors, Motilal Oswal Investment Advisors, and Intensive Fiscal Services Private are the book-running lead managers for the Midwest IPO, while KFin Technologies is the registrar for the public issue.

Midwest said that, in consultation with the book-running lead manager, it may consider an issue of specified securities up to Rs 50 crore as a ‘pre-IPO placement’. Accordingly, if such placement is completed, the fresh issue size will be reduced. The offer is being made through the book-building process, wherein not more than 50 per cent of the net offer shall be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15 per cent of the net offer shall be available for allocation to non-institutional investors, and not less than 35 per cent of the net offer shall be available for allocation to retail individual investors.

Midwest proposes to utilize the net proceeds from the fresh issuance to the extent of Rs 127.05 crore for funding capital expenditure by Midwest Neostone, its wholly owned subsidiary, towards phase-II of the quartz grit and powder processing plant, and Rs 25.75 crore for capital expenditure for the purchase of electric dump trucks to be used by the company and APGM, its Material Subsidiary. The company also intends to use Rs 3.26 crore for capital expenditure for the integration of solar energy at certain mines of the company, and Rs 53.80 crore for pre-payment/re-payment of, in part or full, certain outstanding borrowings of the Company and APGM, as well as for general corporate purposes.

About Midwest

Hyderabad-based Midwest Limited is one of the leading players in natural stone mining, including granite, marble, quartzite, quartz, and heavy mineral sands. Midwest has mined an average of 1.37 million cubic meters of granite annually, encompassing both marketable and waste granite between FY22-24.

It is India’s largest producer and exporter of Black galaxy granite, a premium variety of granite, which has a sparkling feature with flakes of a golden hue. The company at present holds 20 mining lease licenses, five leases for which mining approvals are in the process, two granite processing units, one quartz crushing and processing unit, and one diamond tool manufacturing plant.