Midwest IPO Review: GMP, Share Price, Valuation, Peer Comparison & More

Midwest Limited is India’s biggest producer and exporter of Black Galaxy Granite, a shiny, premium black stone found only in one small village in Andhra Pradesh. You could say it’s India’s “Kohinoor” of the granite world, and Midwest controls nearly two-thirds of its exports.

The company’s IPO opens on October 15, 2025, and closes on October 17, 2025, with a price band of ₹1,014-₹1,065 per share. The GMP is around ₹125, suggesting a gain of about 11.7% over the issue price. (Remember, GMP just shows investor sentiment; it’s not an official or guaranteed indicator.)

In this blog, we’ll unpack what Midwest does, how it makes money, where your IPO money would go, what risks lie ahead, and whether its valuation makes sense. Let’s break this down step-by-step.

IPO Overview

• IPO Date: October 15 to October 17, 2025
• Total Issue Size: ₹451 crore
• Price Band: ₹1,014 to ₹1,065 per share
• Minimum Investment: ₹14,910
• Lot Size: 14 Shares
• Tentative Allotment Date: October 20, 2025
• Listing Date: October 24, 2025 (Tentative)
• GMP: The GMP for the Midwest IPO is ₹125, reflecting a 11.74% gain over the issue price, according to Chittorgarh.com.

Disclaimer: GMP is an unofficial indicator and is subject to market volatility.

How Midwest Really Makes Its Money

Think of Midwest Ltd as a highly organized rock hunter and seller. For more than 40 years, the company’s main job has been to find special stones hidden deep underground, cut them carefully, and sell them around the world.

The Core of the Business - Natural Stones

Midwest’s biggest money-maker is granite, especially two varieties: Black Galaxy Granite and Absolute Black Granite. Black Galaxy is so rare that it’s found only in one small village in Andhra Pradesh, and Midwest controls most of India’s export market for it. Almost 96% of the company’s sales come from this stone business.

From Mine to Market - The Value Chain

Midwest does everything itself, from digging stones to selling them.

Mining: The company owns and operates its own quarries. Big machines called wire saws (special diamond-coated cutting tools) slice huge granite blocks neatly from the ground.

Processing: These raw stone chunks are then shaped, polished, and sized for export.

Selling: Midwest sells these stones worldwide, with over 60% of sales from exports. A lot of this goes to China, which acts as a global hub, redistributing the granite to different countries.

Making Its Own Tools - Diamond Wires

To cut stones smoothly, you need strong diamond wires. Instead of buying them, Midwest makes them itself. This smart step, called backward integration, helps save money and also lets the company sell extra wires to other miners, earning additional income.

The Future Plan - New Materials

Midwest is now expanding beyond granite. It’s building a new Quartz plant for making materials used in solar panels and engineered stone, and preparing to start Heavy Mineral Sands mining, through which minerals like Rutile and Zircon will be used in making paints, magnets, and electronics.

Smart Way of Handling Money

Since stones are high-value items, Midwest keeps payments secure. Most foreign buyers pay in advance or through a Letter of Credit, which is a bank’s promise to pay. This practice ensures timely cash flow and protects from customer defaults.

In short, Midwest doesn’t just dig stones; it controls the full process, makes its own tools, and is now preparing to step into the future with quartz and mineral sands.

Objectives of the IPO

Midwest is raising ₹451 crore, which includes a fresh issue of ₹250 crore (company gets this money) and an offer for sale (OFS) of ₹201 crore (goes to selling shareholders, not to the company).

Here’s how the fresh cash will be used:

• Quartz Expansion (₹130.3 crore): This money will fund Phase II of its quartz plant, boosting capacity by 3.03 lakh tonnes per year. This expansion prepares the firm for the rising demand in quartz-based products used in luxury interiors and the solar industries.
• Electric Mining Trucks (₹25.76 crore): Electric trucks reduce diesel use and maintenance costs. Think of them like fuel-saving upgrades for industrial use, helping both profit and sustainability.
• Solar Energy Setup (₹3.26 crore): Solar power for mines will cut the company’s electricity bill and make it greener.
• Debt Repayment (₹56.22 crore): Midwest had borrowings of about ₹270 crore as of June 2025. Paying part of it down means fewer interest expenses and a stronger balance sheet.
• General Corporate Use: The rest will support day-to-day business needs, new equipment, and routine expansion.

Simply put, Midwest isn’t just cashing out through this IPO. It’s raising fresh money to grow its presence in quartz and improve operational efficiency, a good sign for long-term investors.

Strengths:

• Dominant Market Position: Midwest owns about 64% of India’s Black Galaxy Granite export market. That’s massive control over a globally admired premium product. Such dominance gives it strong pricing power and stable orders.
• Consistent Financial Growth: Revenue grew from ₹502 crore in FY23 to ₹626 crore in FY25, an 11.6% annual growth rate. Profit after tax nearly doubled from ₹54 crore to ₹107 crore, showing solid operational discipline.
• Healthy Profitability: The company’s EBITDA margin (which shows operating profit before interest and taxes) improved from 17.8% to 27.4% in two years. It means Midwest earns ₹27 operating profit for every ₹100 in sales.
• Strong Debt Servicing Ability: Its Interest Coverage Ratio of 13.37 means it earns ₹13 for every ₹1 of interest cost. That’s a wide safety cushion.
• Low Debt Burden: Debt-to-equity is just 0.43×, showing the company isn’t heavily dependent on loans.

Risks:

• Geographic Dependence: Nearly 70% of revenue comes from Black Galaxy Granite, available only in Chimakurthy, Andhra Pradesh. Any disruption there, say from weather, mining bans, or local issues, could seriously affect operations.
• High Revenue Dependence on China: More than 50% of exports go to China. If Chinese demand slows or trade conditions tighten, Midwest could feel the pinch.
• Customer Concentration: Its top 10 customers contribute around 63% of total sales. Losing even one could impact revenue. While Midwest takes advances and letters of credit (LCs) (a bank promise to pay), this still concentrates risk.
• Foreign Exchange Risk: About 64% of its revenue is in foreign currency. Changes in the rupee-dollar rate can boost or hurt profits. As of June 2025, its unhedged receivables were ₹153 crore.
• High Valuation Premium: The IPO is priced at a P/E of 35.8×, more than 2.8 times higher than peer Pokarna (12.7×). This means investors are paying ₹36 for every ₹1 of profit, pricing in a lot of expected growth. If growth slows, that premium may not hold.

For detailed information, visit Midwest’s IPO page.

Peer Comparison

The primary listed competitor of Midwest is Pokarna Limited. The company operates in the dimensional natural stone industry, which is generally fragmented with many smaller and medium-sized enterprises.

Source: RHP, internal calculation

Midwest is smaller than Pokarna in size and margins, but stronger in managing debt and interest. However, investors will need the quartz expansion to deliver fast growth to justify its higher pricing.

Midwest’s Financial Performance

• Revenue: ₹626 crore in FY25, up from ₹502 crore in FY23.
• Profit After Tax: ₹107.5 crore in FY25, up 97% in two years.
• EBITDA Margin: Up sharply to 27.4% from 17.8%.
• Net Profit Margin: Stable near 17%, showing higher efficiency.
• Interest Coverage: 13.37x - shows strong financial health.
• Borrowings: ₹270 crore (Q1 FY26). While up from FY23, the IPO will help reduce debt.

Midwest’s profits have grown almost twice as fast as its sales because costs are under control and operations are efficient.

Midwest IPO Valuation

At the top price band of ₹1,065 per share, Midwest will list at a Price-to-Earnings (P/E) ratio of 35.82x based on FY25 profits. In simple words, investors will be paying about ₹36 for every ₹1 that Midwest earned last year. That’s more than 2.8 times higher than its listed peer, Pokarna, which trades at 12.73x earnings.

Looking at other valuation yardsticks:

• Midwest’s Enterprise Value-to-Revenue is 6.49x, meaning the market will value the company at nearly 6.5 times its annual sales.
• Its Enterprise Value-to-EBITDA is 23.66x, showing investors are willing to pay ₹24 for every ₹1 in operating profit.

Why such a high price? Partly because Midwest has historically shown better efficiency in some areas. In FY24, its Return on Equity (RoE) was 23.78%, meaning it made ₹23.78 profit for every ₹100 invested, better than Pokarna’s 14.75%. It also services debt more comfortably, with an Interest Coverage Ratio of 13.37x versus Pokarna’s 7.59x, indicating lower financial risk.

However, profitability margins tell a gentler story:

• Net Profit Margin: 17.17% for Midwest vs 20.16% for Pokarna.
• EBITDA Margin: 27.43% for Midwest, lower than Pokarna’s 35.03%.

The market’s rich pricing suggests strong belief in Midwest’s future growth, from projects like the Phase II Quartz Plant expansion, but it also leaves little room for disappointment. If revenue growth slows from the recent 6.93% rise between FY24 and FY25, investors paying this premium might question the tag.

In short: the IPO is not cheap. It prices in a lot of future success, so buyers must be confident that Midwest will deliver on its expansion plans and sustain its performance.

Disclaimer: The P/E ratio here is calculated using the company’s post-IPO equity and its most recent FY25 net profits at the upper end of the price band.

Who Leads Midwest?

• Mr. Kollareddy Rama Raghava Reddy (Founder and President) - Over 40 years in mining, he built Midwest from scratch. He’s known as one of India’s pioneers in commercial granite mining. However, he has a pending CBI notice related to a past joint venture, which investors should note. He has also given personal guarantees worth ₹107 crore for company loans.
• Mr. Kollareddy Ramachandra (CEO) - With over 20 years in the trade, he leads operations and marketing. Under his leadership, profits nearly doubled between FY23 and FY25.
• Mrs. Uma Priyadarshini Kollareddy and Mrs. Kukreti Soumya (Whole-time Directors) - Both have strong international and business backgrounds. Uma, an MBA from Columbia, was once an investment banker in New York; Soumya built Midwest’s tool manufacturing arm. They draw fixed salaries plus a small share of profits.

Together, this leadership has both mining grit and global management vision, though decision-making is family-centric.

Who’s Making Money from the IPO?

The Offer for Sale totals ₹201 crore:

• Mr. Kollareddy Rama Raghava Reddy is selling ₹181 crore worth of shares.
• Mr. Guntaka Ravindra Reddy to sell ₹20 crore, bought at ₹0.03 per share, a paper return of over 35,000%.

Since part of the IPO is also a fresh issue, new investors’ money will fund real business expansion rather than just promoter exits, an encouraging sign.

Industry Outlook

India’s granite and natural stone industry is worth around $40 billion and growing with infrastructure projects like the National Infrastructure Pipeline. From luxury housing to urban metro stations, granite and quartz are everywhere.

Quartz is the new opportunity zone. Its demand in India is expected to grow by 11-12% annually due to rising use in solar panels and modern interiors. So, Midwest is right to focus here.

However, mining remains capital-heavy and regulated. Getting clearances can take time, and competition from synthetic or man-made stone is rising globally.

Analyst View

Midwest Limited is a solid, niche company, profitable, dominant in a premium product, and backed by 40 years of experience. It’s using IPO funds to grow in quartz and reduce debt, which are both healthy moves. However, investors should be aware of three big watchpoints: China reliance, one-product concentration, and lofty valuation.

How to Apply for an IPO on INDmoney?

1. Download the INDmoney app and complete your KYC.
2. Go to INDstocks → IPO, or just search “IPO”.
3. Tap on an IPO from the list of live IPOs.
4. View key details like price band, lot size, and dates.
5. Tap Apply Now and choose the number of lots.
6. Use INDpay UPI for instant mandate tracking.
7. Your funds will be blocked until the share allotment is finalized.

For a seamless application process, visit the INDmoney IPO page.

Disclaimer

Source: Midwest's RHP. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.