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Hyderabad based Midwest Limited, engaged in the business of exploration, mining, processing, marketing, distribution and export of natural stones, has received final observation from the capital markets regulator, Securities and Exchange Board of India (SEBI), to raise funds through an initial public offering (IPO).
The Company had filed its IPO papers with Sebi on September 30, 2024.
The IPO, with a face value of Rs 5 per equity share, is a mix of fresh issue of shares up to Rs 250 crore and an offer for sale (OFS) of up to Rs 400 crore by Promoter Selling Shareholders. The offer also includes a reservation for a subscription by eligible employees and a discount is being offered to eligible employees bidding in the employee reservation portion.
The offer for sale consists of up to Rs 360 crore by Mr. Kollareddy Rama Raghava Reddy and up to Rs 40 crore by Mr. Guntaka Ravindra Reddy.
The company, in consultation with the book-running lead manager, may consider an issue of specified securities up to Rs 50 crore as a “pre-IPO placement”. If such placement is completed, the fresh issue size will be reduced.
The company intend to utilize the Net Proceeds from the fresh issuance to the extent of Rs 127.05 crore for funding capital expenditure by Midwest Neostone Private Limited (“Midwest Neostone”), its wholly owned subsidiary, towards phase-II of the quartz grit and powder processing plant (the “Phase-II Quartz Processing Plant”); Rs 25.75 crore for capital expenditure for purchase of electric dump trucks (“Electric Dump Trucks”) to be used by the Company and APGM, its Material Subsidiary; Rs 3.26 crore for capital expenditure for integration of solar energy at certain Mines of the Company; Rs 53.80 crore for pre-payment/re-payment of, in part or full, certain outstanding borrowings of the Company and APGM; and general corporate purposes.
Midwest Ltd., established in 1981, has developed extensive knowledge and expertise in natural stone mining, including granite, marble, quartzite, quartz, and heavy mineral sands. Over the past three fiscal years, Midwest has mined an average of 1.37 million cubic meters of granite annually, encompassing both marketable and waste granite.
It is India’s largest producer and exporter of Black Galaxy Granite, a premium variety of Granite, and held a share of approximately 23% of the Indian export market for Black Galaxy Granite in Fiscal 2024, according to a CRISIL Report mentioned in the DRHP, exporting 48,249 cubic meters of Black Galaxy Granite during Fiscal 2024. It is also one of the largest producers in Absolute Black Granite, both of which have high demand. Its Absolute Black Granite production accounted for 10.8% of the overall black granite production in India during Fiscal 2024.
Midwest’s recent product additions, includes Quartzite and Laza Grey Marble, are being promoted through a B2B2C strategy. These materials are positioned to substitute imported marble and quartzite in the Indian market due to their similar aesthetic and functional characteristics. Midwest anticipates this expansion to drive increased revenue starting next year, reinforcing its dedication to providing cost-effective, high-quality materials.
DAM Capital Advisors Limited, Intensive Fiscal Services Private Limited, and Motilal Oswal Investment Advisors Limited are the book-running lead managers, and KFin Technologies Limited is the registrar of the issue.
