Midwest’s IPO is LIVE — Evaluate Before You Act

Midwest Ltd, a leading player in India’s Black Galaxy Granite industry, has launched its Initial Public Offer (IPO), which will remain open until October 17, 2025. With more than four decades of experience, the company has built a solid foundation and is now looking to expand into fast-growing sectors.

Is this IPO an attractive investment opportunity or should investors tread cautiously? As always, it's crucial to evaluate the growth potential and associated risks before making a decision. For a detailed review, see our comprehensive IPO analysis here.

Midwest IPO Details 

• Issue Details: Mainstream
• Issue Size: Rs 451 crore
• Fresh Issue: Rs 250 crore
• Offer for Sale: Rs 201 crore
• Price Band: Rs 1,014 – Rs 1,065
• Lot Size: 14 shares
• Listing Date: October 24, 2025

Overview of Midwest Ltd

• Midwest is a prominent player in the exploration, mining, processing, marketing, distribution and export of natural stones. It ranks as one of India’s largest producers of Absolute Black and Black Galaxy Granite.  In addition to its core granite operations, the company generates revenue from diamond wires and other processed stones, with a significant portion of its income coming from exports.
• Midwest operates 20 mines, including 16 granite mines, 3 quartz mines and 1 marble mine. Its resource base spans 25 locations across key Indian states, including Telangana, Andhra Pradesh, Karnataka and Tamil Nadu.

Midwest Key Strengths

• Market Leadership: Midwest is India’s largest producer and exporter of Black Galaxy Granite, commanding ~64% of the country’s Black Galaxy Granite export market share in FY25. It also accounts for 15.7% of the national production of Absolute Black Granite. Furthermore, it is the highest royalty payer in this segment, highlighting its scale of operations and industry dominance.
• Strong Financial Growth: Midwest has recorded impressive growth between FY23 and FY25, with operating revenue increasing at a compound annual growth rate (CAGR) of 12%, EBITDA growing at a 38% CAGR and net profit surging by 41%.
• Margin Expansion: Midwest’s profitability has consistently improved, with EBITDA margin rising from 17.83% in FY23 to 27.43% in FY25. Similarly, net profit margin increased from 10.83% to 17.17% during the same period, signalling improved operational efficiency and profitability.
• Solid Return Ratios: Midwest maintains healthy return ratios, with a Return on Equity (ROE) of 19.42% and a Return on Capital Employed (ROCE) of 18.84%, reflecting its robust profitability and effective capital utilization.

Midwest Risk Factors

• Client Concentration: A significant portion of Midwest’s revenue is reliant on a small group of clients. In FY25, the top 10 clients contributed to 51.21% of total revenue. Any loss or reduction in business from these key clients could have a considerable negative impact on the company’s financial performance.
• Heavy Dependence on China: A large share of Midwest’s operating revenue comes from China, which serves as a global distribution hub for the Granite industry. Over 50% of revenue during the three-month period ending June 30 and FY25 was generated from Chinese customers. Any slowdown in Chinese demand, regulatory changes, or trade restrictions could materially impact the firm’s sales and profitability.
• Subsidiary & JV Losses: Some of Midwest’s subsidiaries and joint ventures have experienced losses in the past. Continued losses from these entities could adversely impact the firm’s consolidated business and overall performance.
• Contingent Liabilities: As of June 30, 2025, Midwest has contingent liabilities and commitments totalling Rs 140.74 crore. If these liabilities materialize, they could negatively affect the company’s financial position.
• Legal Risks: Midwest, along with its subsidiaries, directors and promoters, is involved in ongoing legal proceedings amounting to approximately Rs 151.88 crore. Unfavourable legal outcomes could materially affect the company’s financial health, operational stability and reputation.

Final Thoughts: Should You Subscribe to Midwest’s IPO?

• MidWest has consistently shown growth and solidified its position as a key player in the Indian granite industry, particularly within the premium Black Galaxy segment. Its robust financial performance, operational efficiency and strategic focus on diversification into sectors like quartz and heavy mineral sands reflect its potential for long-term growth.
• Furthermore, the company’s sustainability initiatives, such as transitioning to electric vehicles and incorporating solar energy, support its positive operational outlook.
• However, with a P/E multiple of 27x based on FY25 earnings, the current valuations appear elevated, as much of the short-term upside seems already priced in. Moreover, the firm’s significant dependence on China, which accounts for over 50% of its revenue, raises concerns about its exposure to geopolitical and market risks.
• Short-term traders could benefit from potential listing gains, but given the premium valuation and execution-related risks, a more prudent approach would be to “buy on dips” post-listing after the stock stabilizes. 

For a deep dive into other IPOs, explore: IPO Corner on Liquide