Midwest
- Midwest is coming out with a 100% book building; initial public offering (IPO) of 44,48,821 shares of Rs 5 each in a price band Rs 1014-1065 per equity share.
- Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
- The issue will open for subscription on October 15, 2025 and will close on October 17, 2025.
- The shares will be listed on BSE as well as NSE.
- The face value of the share is Rs 5 and is priced 202.80 times of its face value on the lower side and 213.00 times on the higher side.
- Book running lead managers to the issue are DAM Capital Advisors, Intensive Fiscal Services and Motilal Oswal Investment Advisors.
- Compliance Officer for the issue is Rohit Tibrewal.
Profile of the company
Midwest has a legacy of more than four decades in the dimensional natural stone (i.e., naturally occurring stones) industry with experience in exploration, development and operation of mines, stone processing and fabrication, sales, distribution and marketing of various types of natural stone. It is engaged in the business of exploration, mining, processing, marketing, distribution and export of natural stones, with an emphasis on sustainability. It is India’s largest producer and exporter of Black Galaxy Granite (a variety of Granite which is sparkling with flakes of a golden hue), and held a share of approximately 64% of the Indian export market for Black Galaxy Granite in Fiscal 2025, exporting 44,992 cubic meters of Black Galaxy Granite during Fiscal 2025.
The company is also the largest producer in Absolute Black Granite (a variety known for its remarkable surface finish) in India, both of which have high demand. Its Absolute Black Granite production accounted for 15.7% of the overall black granite production in India during Fiscal 2025. It places much emphasis on decarbonizing its operations to improve the sustainability of its business. Its mining operations are mechanized and incorporate advanced engineering and process optimization, aided by vertical integration of key operational components such as customized Diamond Wires. It beneficially leverages its experience and organizational capabilities to serve as an organized player in an otherwise unorganized sector with the objective of catering to the requirements of its customers, improving its processes, expanding its market reach and building its resource base.
The company’s existing business activities primarily comprise extracting and processing Dimensional Granite (i.e., Granite that is cut to conform to the specifications in terms of size and shape), particularly the Black Galaxy and Absolute Black varieties (Natural Stone Segment). In addition to its Natural Stone business, it also manufactures Diamond Wire, which is a precision cutting tool employed in the natural stone and construction industries to size stones and other hard substances with precision in mines and processing/ fabrication facilities (Diamond Wire Segment). While its operations in the Diamond Wire segment began with the objective of backward integration and supporting its Natural Stone Segment, at present, its operations in this segment cater both to it captive consumption as well as meeting market demand of the Indian mining and construction industry.
Proceed is being used for:
- Investment in Midwest Neostone Private Limited (Midwest Neostone), its wholly owned subsidiary, by way of a loan, towards funding capital expenditure for Phase II of the quartz grit and powder processing plant (the Phase II Quartz Processing Plant)
- Capital expenditure for purchase of electric dump trucks (Electric Dump Trucks) to be used by the company and investment in Andhra Pradesh Granite (Midwest) Private Limited (APGM), its Material Subsidiary, by way of a loan, for purchase of Electric Dump Trucks
- Capital expenditure for integration of solar energy at certain Mines of the company
- Pre-payment/re-payment of, in part or full, certain outstanding borrowings of the company and investment in APGM, by way of a loan, for pre-payment/ re-payment of, in part or full, certain outstanding borrowings of APGM
- General corporate purposes
Industry Overview
The natural and engineered stone industry encompasses the extraction, processing, and distribution of both naturally occurring stones such as granite, marble, and limestone, as well as man-made materials such as engineered quartz slabs. Natural stones are valued for their unique patterns, durability, and timeless appeal, making them a popular choice for countertops, flooring, and architectural elements. In 2023, the US produced 2.3 million metric tonne of dimension stone, according to the US Geological Survey (USGS), highlighting the significant scale of natural stone extraction. In contrast, engineered stones are manufactured by combining natural stone fragments with resins and pigments, offering durability, uniformity, and a wide range of design options. The Indian Bureau of Mines reported that domestic production of stone products, including both natural and engineered varieties, plays a substantial role in the global stone industry. The industry has seen significant growth due to advancements in quarrying and manufacturing technologies, increased consumer preference for sustainable and high-quality materials, and expanding applications in residential, commercial, and infrastructure projects.
In India, the granite industry significantly impacts the economies of states such as Tamil Nadu, Andhra Pradesh, Telangana, Karnataka and Rajasthan. While granite is considered costly for decorative purposes domestically, its export potential surpasses its utilisation and trade within the country. The total granite resources in India stood at an estimated 46,320 million cubic metre as on April 1, 2015. In terms of classification by grade, 7% of total resources consist of black granite, while 92% consist of coloured granite. About 1% of the resources remain unclassified. The exports volume of quartzite from India increased from 102 KT in fiscal 2022 to 126 KT in fiscal 2025 whereas the exports value of quartzite increased till fiscal 2024 to Rs 1,529 million but experienced sharp decline in fiscal 2025 owing to weakening global demand. Overall, the registered a CAGR of 7.3% over fiscal 2022-2025.
Granite production increased from 17,193 KT in fiscal 2022 to 19,709 KT in fiscal 2025, clocking a CAGR of 4.7%, driven by domestic demand for granite from the building and construction industry. Rajasthan is the largest producer of granite in India, accounting for 59% (11,586 KT) of the total granite produced in fiscal 2025. Other significant granite producing states are Andhra Pradesh and Telangana, which accounted for 16% (3,237 KT) and 14% (2,801 KT), respectively, of production in fiscal 2025. Rajasthan’s share in overall granite production increased from 48% in fiscal 2022 to 59% in fiscal 2025. Granite production is projected to grow to 26,375-27,643 KT in fiscal 2030, logging a CAGR of 6.0-7.0% between fiscals 2025 and 2030. The production is expected to be driven by increased domestic demand as well as exports of granite.
Pros and strengths
India’s largest producer and exporter of Black Galaxy Granite: Black Galaxy is available in only one village in Andhra Pradesh in the entire world. The company is India’s largest producers and exporters of Black Galaxy Granite. It has produced 66,548 cubic meters of Black Galaxy Granite during Fiscal 2025, and held a share of approximately 64% of the Indian export market for Black Galaxy block Granite during Fiscal 2025. The company operates 3 Black Galaxy Granite Mines which allowed it to export 44,992 cubic meters during Fiscal 2025. Further, the sale price for Black Galaxy Granite ranges between Rs 50,000- Rs 100,000 per cubic meter while the sale price for black Granite ranges between Rs 30,000- Rs 75,000 per cubic meter. Among all the granite categories available in India, average realizations are the highest for Black Galaxy Granite.
Presence across the entire Dimensional Granite value chain: The company’s mine to distribution capabilities span across the Dimensional Granite value chain and allow it to effectively cater to its customers’ requirements. Through its 16 operational Granite Mines, it is able to extract and supply dressed dimensional Granite blocks (in varieties such as Black Galaxy, Absolute Black and Tan Brown) to its customers. It also operates two processing facilities where smaller Granite blocks are cut and polished, rendering the Granite suitable for use in final products such as counter-tops, steps, window-sills, dining islands, facades and floor/ wall cladding. Its processing facilities enable it to enhance the recovery from extracted Granite blocks of commercial quality by allowing it to salvage rejects obtained from dressing of large-sized blocks, and produce marketable products using such rejects.
Emphasis on R&D and Technology Integration: It places emphasis on R&D, which primarily comprises (i) tracing, identifying and establishing new mineral deposits to expand its resource portfolio; and (ii) developing methods to increase operational efficiency, reduce costs and improve the quality of its products. The company has a dedicated R&D and Exploration team, comprising 8 personnel, including 6 geologists, 1 quality control specialist and 1 chemist who have, on average, 16.10 years of industry experience. Its R&D team has enabled it to undertake various business initiatives like Exploration of New Mines, Electric Squaring and Dressing Station, Electric Dump Trucks, Phasing-out Usage of Explosives etc.
Significant establishment costs with a long gestation period benefitting established players: Mining is a highly capital-intensive business involving significant expenditure at each stage of the process, namely, exploration, development, exploitation and reclamation. There is a long gestation period to transition from the exploration stage to the production stage. Further, natural stone mining is subject to extensive regulation in India, requiring mining leases and other approvals, permits and consents from government authorities which are typically granted on an exclusive basis for a period of up to 30 years, which can be extended to 50 years under the Mines and Minerals (Development and Regulations) (MMDR) Act. Further, mechanized mining requires the acquisition and deployment of highly customized and expensive machinery, technically specialized and skilled personnel with competence in various disciplines such as Geology, Mining and Engineering. It further employs complex production methods which involve a significant learning curve. Accordingly, these requirements of the Granite mining industry in India give established players a competitive advantage over new players in the industry.
Risks and concerns
Maximum revenue comes from limited customers: The company is dependent on certain key customers for a portion of its revenue from operations, with its top 10 customers contributing 63.22%, 51.21%, 48.37% and 53.51% of its revenue from operations in the three-month period ended June 30, 2025 and Fiscals 2025, 2024 and 2023, respectively. A decrease in the revenue it earns from such customers could adversely affect its business, results of operations, cash flows and financial condition.
Significant revenue comes from China: The company derives its revenue from operations from outside India and during the three-month period ended June 30, 2025, Fiscals 2024 and 2023, more than 50% of its revenue from operations was derived from customers located in China, which acts as a global distribution hub for the Granite industry. Any adverse developments in these markets or an inability of China to continue to act as a hub to cater to the global demands, could adversely affect its business and results of operations.
Geographical constrain: The company’s Mines, Granite processing facilities, Diamond Wire manufacturing facility, Quartz Processing Plant and Registered Office are all located in the southern Indian states of Telangana and Andhra Pradesh. Further, Black Galaxy Granite, which accounted for 69.77%, 69.55%, 72.35% and 70.46% of its revenue from operations in the three-month period ended June 30, 2025 and Fiscals 2025, 2024 and 2023, respectively, is entirely mined from its three Mines in Chimakurthy, Andhra Pradesh. Any social, political or economic disruption or natural calamities in this region or changes in the policies of these states or local governments could lead to a disruption of its operations, which may adversely affect its business, cash flows, results of operations and financial condition.
Dependence on third party transporters: The company uses third party transporters to transport rough Granite blocks to (i) ports and stockyards, and (ii) its Granite processing facilities. Further, it relies on access to port facilities to export its products to overseas customers, primarily the port facilities located at Chennai in Tamil Nadu and Krishnapatnam, Andhra Pradesh. As of June 30, 2025, it transported 48.30% of the dressed Granite blocks through arrangements with certain third party transporters. Its top three transporters accounted for 87.38%, 86.93%, 79.53%, and 61.24%, of its expenditure on transportation for the three-month period ended June 30, 2025 and Fiscals 2025, 2024 and 2023, respectively. Its success depends on the smooth supply and transportation of its products, which is subject to various risks, uncertainties and other hazards beyond its control such as unavailability of vessel space at the ports, port congestion, inadequate port infrastructure, accidents, adverse weather conditions, strikes and civil unrest, which could adversely affect supplies from its suppliers.
Outlook
Midwest is engaged in the business of exploration, mining, processing, marketing, distribution, and export of natural stones. The company is a producer and exporter of Black Galaxy Granite, a unique granite variety known for its sparkling golden flakes. Midwest operates 16 granite mines across 6 locations in Telangana and Andhra Pradesh, producing a wide range of granite varieties, including: Black Galaxy, Absolute Black and Tan Brown. Further, has identified 25 resource locations across Andhra Pradesh, Telangana, Karnataka, and Tamil Nadu, ensuring long-term sustainability. On the concern side, the company is dependent on certain key customers for a portion of its revenue from operations and a decrease in the revenue it earns from such customers could adversely affect its business, results of operations, cash flows and financial condition. Also, the company derives its revenue from operations from outside India and during the three-month period ended June 30, 2025, Fiscals 2024 and 2023, more than 50% of its revenue from operations was derived from customers located in China, which acts as a global distribution hub for the Granite industry. Any adverse developments in these markets or an inability of China to continue to act as a hub to cater to the global demands, could adversely affect its business and results of operations.
The issue has been offering 44,48,821 shares in a price band of Rs 1014-1065 per equity share. The aggregate size of the offer is around Rs 451.11 crore to Rs 473.80 crore based on lower and upper price band respectively. Minimum application is to be made for 14 shares and in multiples thereon, thereafter. On performance front, the company has reported 6.93% rise in revenue from operations at Rs 6261.82 million in FY25 as compared to Rs 5,856.24 million in FY24. Moreover, the company’s net profit surged 32.87% to Rs 1,332.99 million in FY25 as compared to Rs 1,003.24 million in FY24.
The company aims to cater to the growing domestic market which can complement demand patterns in international markets. For instance, while Black Galaxy Granite is sold at a premium in overseas markets as compared to the Indian market, Absolute Black Granite can serve as a lower cost alternative to Black Galaxy Granite which can be sold at competitive prices in the domestic market. The attributes of Absolute Black Granite such as high hardness, durability, resistance to weathering and low maintenance requirements, rendering it suitable for use in modern architectural coverings such as kitchen counters, flooring, bath vanities, cladding, windowsills, backsplashes, fireplaces, steps, building facades and fountains. The company is working on positioning Absolute Black Granite as an alternative to steel foundations and plinths for heavy precision machine tools where the requirements include tolerance to stress, resistance to wear and tear over a long period of time and ultra-low co-efficient of linear expansion.
