Varmora Granito Opens Rs. 708 Crore IPO
Varmora Granito, a ceramic and vitrified tiles manufacturer, has launched its initial public offering (IPO) worth Rs. 708.02 crore. The company aims to use the proceeds to reduce debt and expand its building materials business. The IPO, which opened on September 22, 2026, combines a fresh issue of Rs. 320 crore with an offer for sale of Rs. 388.02 crore. The price band is set at Rs. 140 to Rs. 148 per share.
Debt Repayment Strategy
The company plans to allocate Rs. 245 crore from the fresh issue to repay borrowings and accrued interest. CFO Bhavesh Koshti stated that Varmora Granito currently has approximately Rs. 240 crore of net debt, which will be largely cleared post-IPO, allowing the company to become net cash positive. The company had invested around Rs. 450 crore in two manufacturing plants over the past two years, leading to increased inventory and working capital pressure, but inventory levels have since declined.
Premium Tiles Driving Growth
Varmora Granito operates eight manufacturing facilities in Morbi, Gujarat, with a total tile production capacity of 50.6 million square metres, currently utilised at about 72%. The company sold 38.34 million square metres of tiles in FY26, up from 36.12 million in FY24. Glazed vitrified tiles (GVT) have become the main growth category, contributing 84% of revenue, up from 57% three years ago. GVT volumes grew at an annual rate of 12% between FY23 and FY25.
Faucet Acquisition and South India Expansion
Chairman and Managing Director Bhavesh Varmora revealed plans to acquire a faucet manufacturing business with an annual turnover capacity of about Rs. 100 crore. The company currently manufactures sanitaryware but outsources faucets for its bathware division. “We have identified the targets. We are working on it. It will take another two quarters,” Varmora said. Additionally, the company is considering a joint venture in South India, following a similar arrangement in the northeast.
IPO Subscription and Analyst Views
As of September 22, the IPO received bids for 0.08 times the shares available. Retail investors subscribed 0.14 times their allocated portion, while non-institutional investors subscribed 0.03 times. Brokerages offered mixed reviews: Ventura gave a ‘Subscribe’ rating, citing premium products and wider distribution, while Swastika assigned a ‘Neutral’ rating due to limited valuation support for short-term listing gains. The minimum retail investment is Rs. 14,948 for 101 shares. Allotment is expected on September 25, with listing on NSE and BSE on September 29.
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