Anchor Investment Secured
Varmora Granito raises Rs 212 crore from anchor investors ahead of upcoming IPO.
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Key Points
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Varmora Granito allotted 1.43 crore shares to anchor investors; the anchor participation was described as involving 17 funds, while domestic mutual funds received 74.86 lakh shares through nine schemes.
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The company reduced the fresh issue from the previously proposed Rs 400 crore and cut the offer-for-sale from 5.24 crore shares in its draft filing to 2.62 crore shares.
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Varmora Granito reported fiscal 2026 profit of Rs 62 crore, up 76.1% from Rs 35.2 crore, while revenue rose 4.6% to Rs 1,512.5 crore.
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The company plans to use the fresh-issue proceeds not only for borrowings but also to clear dues owed by subsidiaries Covertek Ceramica, Varmora Sanitarywares and Simola Tiles; total borrowings of the company and subsidiaries stood at Rs 350.6 crore as of May 2026.
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Varmora Granito operates eight manufacturing facilities, and its B2C retail segment accounted for 66.8% of domestic sales in fiscal 2026, with B2B contributing the remaining 33.2%. The company competes with Kajaria Ceramics, Somany Ceramics, Asian Granito India and Orient Bell.
Varmora Granito, a Gujarat-based ceramics and tiles maker, raised ₹212.4 crore from anchor investors at ₹148 per share ahead of its ₹708-crore IPO. The public offering, which opens September 22 and closes September 24, includes ₹320 crore in fresh shares and ₹388 crore in existing shares being sold by current shareholders, according to Moneycontrol. Shares are set to list on September 29.
The anchor book drew 17 institutional funds, including Goldman Sachs, ICICI Prudential Mutual Fund, and BNP Paribas Financial Markets. The grey-market premium stood at ₹10 per share, suggesting a potential 6.76% gain over the issue price, though NDTV Profit notes this unofficial indicator does not guarantee listing performance.
Debt Repayment and Growth Plan
Varmora Granito will use ₹245 crore of the fresh proceeds to repay borrowings and settle dues owed by three subsidiaries: Covertek Ceramica, Varmora Sanitarywares, and Simola Tiles. The company and its subsidiaries carried total debt of ₹350.6 crore as of May 2026, according to Business Today. The remainder of fresh funds will go toward general corporate purposes.
Strong Financial Growth Drives IPO Confidence
Varmora Granito reported fiscal 2026 profit of ₹62 crore, jumping 76.1% from ₹35.2 crore the prior year. Revenue climbed 4.6% to ₹1,512.5 crore, powered by its eight manufacturing facilities across India. The company operates in both retail (B2C) and wholesale (B2B) channels, with retail accounting for 66.8% of domestic sales.
Anchor Book Demand Outpaces Retail Interest
The anchor round attracted 1.43 crore shares, with domestic mutual funds securing 74.86 lakh shares across nine schemes. However, early subscription data showed slower retail demand. According to Scanx Trade, the IPO received only 0.04x subscription on Day 1, with retail investors leading but Non-Institutional Investors posting just 0.08x interest. This contrasts with typical IPO enthusiasm.
Competitive Market and Reduced Issue Size
Varmora Granito competes with larger players like Kajaria Ceramics, Somany Ceramics, Asian Granito India, and Orient Bell in India's ceramic tiles sector. The company reduced its fresh issue from the originally proposed ₹400 crore and cut the offer-for-sale from 5.24 crore shares to 2.62 crore shares in its revised filing, Trade Brains reports. This rightsizing reflects market conditions and the company's focused capital needs.
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