🧵 Borana Weaves Limited IPO – Complete Analysis for Investors
🏢 Company Overview
Borana Weaves Limited is a Surat-based textile company, incorporated in 2020, focusing on:
Manufacturing synthetic grey fabrics using water jet looms
Polyester textured yarn (PTY) for various applications
3 existing units with plan for expansion (Unit 4) in the pipeline
The company operates with an eye on cost-effective, high-volume production and is vertically integrated across spinning, weaving, and partial dyeing.
🏭 Sector Overview – Synthetic Textile Industry
India’s textile exports crossed $44 billion in FY22, driven by:
Demand for synthetic & blended fabrics
PLI schemes and global supply chain shifts
Surat as a key cluster for synthetic textiles
Challenges:
Raw material price volatility (mainly polyester)
Environmental compliance norms
Fragmented and highly competitive domestic market
📦 IPO Details
Detail Info Issue Size 67.08 lakh equity shares (Fresh Issue) Face Value ₹10 per share Listing NSE & BSE Issue Type 100% Book Built Use of Proceeds New Unit (₹71.34 Cr), Working Capital (₹26.5 Cr), GCP
| Detail | Info |
|---|---|
| Issue Size | 67.08 lakh equity shares (Fresh Issue) |
| Face Value | ₹10 per share |
| Listing | NSE & BSE |
| Issue Type | 100% Book Built |
| Use of Proceeds | New Unit (₹71.34 Cr), Working Capital (₹26.5 Cr), GCP |
🎯 Objects of the Issue
Purpose Allocation (₹ Cr) Setting up Unit 4 71.34 Working Capital 26.50 General Corporate Purposes TBD
| Purpose | Allocation (₹ Cr) |
|---|---|
| Setting up Unit 4 | 71.34 |
| Working Capital | 26.50 |
| General Corporate Purposes | TBD |
Unit 4 aims to increase capacity from 226.8 million meters to 339.55 million meters by FY27.
📈 Financial Performance Summary
Metric FY22 FY23 FY24 Revenue (₹ Cr) 42.3 135.4 199.1 EBITDA (₹ Cr) 5.2 26.0 41.4 PAT (₹ Cr) 1.8 16.4 23.6 EBITDA Margin (%) 12% 19% 21% PAT Margin (%) 4% 12% 12%
| Metric | FY22 | FY23 | FY24 |
|---|---|---|---|
| Revenue (₹ Cr) | 42.3 | 135.4 | 199.1 |
| EBITDA (₹ Cr) | 5.2 | 26.0 | 41.4 |
| PAT (₹ Cr) | 1.8 | 16.4 | 23.6 |
| EBITDA Margin (%) | 12% | 19% | 21% |
| PAT Margin (%) | 4% | 12% | 12% |
✅ High profitability growth
✅ Efficient scale-up within 3 years
📌 No dividend payout yet – reinvestment focused
📊 Key Financial Ratios (FY24)
Ratio Value ROE 26.9% ROCE 28.1% Net Profit Margin 12% Inventory Days ~60 days Receivables Days ~28 days Debt ₹54 Cr Net Worth ₹76 Cr D/E Ratio ~0.7x
| Ratio | Value |
|---|---|
| ROE | 26.9% |
| ROCE | 28.1% |
| Net Profit Margin | 12% |
| Inventory Days | ~60 days |
| Receivables Days | ~28 days |
| Debt | ₹54 Cr |
| Net Worth | ₹76 Cr |
| D/E Ratio | ~0.7x |
🤝 Peer Group Comparison
Company Revenue (₹ Cr) EBITDA Margin (%) PAT Margin (%) ROE (%) Net Worth (₹ Cr) Debt (₹ Cr) PE (TTM) Borana Weaves 199.1 21% 12% 26.9% 76 54 15 KPR Mill Ltd 4,053.7 20% 14% 20% 2,356 222 37x Arvind Ltd 7,100.5 11% 4% 9% 1,759 3,370 18x Jindal Worldwide 1,861.4 8% 4% 13% 782 738 42x
| Company | Revenue (₹ Cr) | EBITDA Margin (%) | PAT Margin (%) | ROE (%) | Net Worth (₹ Cr) | Debt (₹ Cr) | PE (TTM) |
|---|---|---|---|---|---|---|---|
| Borana Weaves | 199.1 | 21% | 12% | 26.9% | 76 | 54 | 15 |
| KPR Mill Ltd | 4,053.7 | 20% | 14% | 20% | 2,356 | 222 | 37x |
| Arvind Ltd | 7,100.5 | 11% | 4% | 9% | 1,759 | 3,370 | 18x |
| Jindal Worldwide | 1,861.4 | 8% | 4% | 13% | 782 | 738 | 42x |
✅ Borana has better margins, but scale is significantly smaller
❌ Debt of ₹54 Cr on net worth of ₹76 Cr signals financial leverage risk
✅ ROE/ROCE are impressive due to efficient asset usage
✅ SWOT Analysis
Strengths Weaknesses High operating margins No export revenue yet Efficient operations Small scale compared to peers Surat location advantage Dependent on synthetic yarn
Opportunities Threats Textile PLI scheme Raw material price swings Global sourcing shift Regulatory pressure on synthetics
| Strengths | Weaknesses |
|---|---|
| High operating margins | No export revenue yet |
| Efficient operations | Small scale compared to peers |
| Surat location advantage | Dependent on synthetic yarn |
| Opportunities | Threats |
|---|---|
| Textile PLI scheme | Raw material price swings |
| Global sourcing shift | Regulatory pressure on synthetics |
📉 Market Share Risk – TBD 15
While Borana Weaves has achieved sales growth, its market share is too small compared to dominant players like KPR Mill.
📌 Investor Note:
High competition + low brand presence = scalability concerns
High debt-to-equity ratio (~0.7x) for a small-cap textile company
Companies like KPR Mill offer better scale, global reach, and balance sheet strength
🧠 Investor Outlook: Should You Apply?
🟢 Positive Factors:
High margins and returns (ROE/ROCE)
Capacity expansion to drive revenue growth
Integrated production model
High margins and returns (ROE/ROCE)
Capacity expansion to drive revenue growth
Integrated production model
🔴 Caution Flags:
High leverage and financial risk
Small size limits competitive power
No pricing power or export presence
High leverage and financial risk
Small size limits competitive power
No pricing power or export presence
📊 Final Verdict:
💼 Long-Term Watch – NOT Ideal for Immediate Investment
For conservative investors, well-established textile leaders like KPR Mill may offer better long-term risk-adjusted returns due to their scale, market share, and stability.
📢 Disclosure
This report is for educational and informational purposes only. It is not a stock recommendation
