Borana Weaves IPO

Incorporated in 2020, Borana Weaves Limited is a textile manufacturing company based in Surat, Gujarat, specializing in unbleached synthetic grey fabric. This fabric serves as a foundational material for further processing such as dyeing and printing, and is used across various industries including fashion, traditional and technical textiles, home décor, and interior design. In addition to grey fabric, the company also produces polyester textured yarn (PTY Yarn), which is derived from polyester oriented yarn (POY Yarn), a key raw material in their production process.

Borana Weaves operates three manufacturing units in Surat, outfitted with advanced textile machinery to support operations like texturizing, warping, weaving via water jet looms, and fabric folding. As of September 30, 2024, the company’s production infrastructure includes 15 texturizing machines, 6 warping machines, 700 water jet looms, and 10 folding machines, reflecting its significant manufacturing capacity within the synthetic textile sector.

Borana Weaves IPO Strengths

• Borana Weaves has achieved a remarkable compounded annual growth rate (CAGR) of 116.84% over the last three years, with revenues rising from ₹42.33 crore in FY22 to ₹199.06 crore in FY24, making it one of the fastest-growing textile manufacturers in India.
• The company manages the entire production process in-house, from spinning and texturizing to weaving and finishing, which enhances quality control, reduces dependency on external suppliers, and improves operational efficiency.
• Borana Weaves operates three fully functional manufacturing units in Surat, equipped with 700 water jet looms, 15 texturizing machines, and other modern equipment, supporting large-scale, high-quality production.
• The company specializes in unbleached synthetic grey fabric-a critical input for various downstream industries-allowing it to develop deep market expertise and production efficiency in a high-demand segment.
• Its manufacturing units, especially Unit 1, operate at high utilization rates (up to 98%), reflecting strong demand and efficient capacity management, with plans to further expand through a fourth unit.
• The Borana family and group have decades of experience in textiles, with a history of successful diversification and expansion, lending credibility and stability to the company’s growth plans.

Borana Weaves IPO Risks

• The company’s elevated leverage increases financial risk, interest burdens, and vulnerability to economic downturns, potentially limiting future borrowing capacity.
• Heavy depends on POY Yarn suppliers without long-term contracts exposes Borana Weaves to price volatility, supply disruptions, and production delays.
• Unregistered trademarks leave branding assets vulnerable to infringement, risking reputation damage and legal costs.
• Quality Control Orders (QCOs) on polyester/viscose inputs make raw materials 20% costlier in India compared to global markets, eroding export competitiveness.
• Competition from unorganized players and compliance with evolving labor laws may pressure margins and operational efficiency.
• The capital-intensive textile industry requires continuous tech upgrades. Limited R&D focus and scale compared to global peers could hinder innovation and process efficiency.