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Varmora Granito has opened its Rs. 708.02 crore initial public offering as management prepares to reduce debt and expand the company’s building materials business. The ceramic and vitrified tiles maker plans to use Rs. 245 crore from the fresh issue to repay borrowings and accrued interest.
The IPO combines a Rs. 320 crore fresh issue with a Rs. 388.02 crore offer for sale. Bidding opened on September 22, 2026, and will close on September 24. The price band stands at Rs. 140 to Rs. 148 per share.
Varmora Granito currently has about Rs. 240 crore of net debt on its balance sheet. CFO Bhavesh Koshti expects the company to clear most of this amount using the IPO proceeds.
“We have around Rs. 240 crore of net debt sitting into the books, which is largely getting paid off,” Koshti said. He added that the repayment would allow Varmora Granito to become a net cash company after the IPO.
The company has also invested around Rs. 450 crore in two manufacturing plants over the past two years. This spending increased inventory and placed pressure on working capital. However, management said inventory levels have since declined.
Trade receivables stood at Rs. 383 crore, while the working capital cycle reached 96 days. Koshti linked part of the receivables to exports, which account for about 20% of revenue. West Asia remains the company’s main export market.
Varmora Granito has enrolled 115 established dealers in a channel financing programme. Management expects this arrangement to reduce receivables and shorten the working capital cycle.
Varmora Granito operates eight manufacturing facilities in Morbi, Gujarat. Its total tile production capacity stands at 50.6 million square metres, with capacity utilisation at around 72%.
The company sold 38.34 million square metres of tiles in FY26, compared with 36.12 million square metres in FY24. It also manufactures about 82% of its glazed vitrified tile requirements internally.
Glazed vitrified tiles, known as GVT, have become the company’s main growth category. Their contribution to revenue increased from 57% three years ago to 84% in the previous financial year. GVT volumes grew at an annual rate of 12% between FY23 and FY25.
Management said overall revenue grew at a slower rate because the company reduced the trading of older polished vitrified and ceramic tile products. Revenue from operations reached approximately Rs. 1,512.5 crore in FY26.
Varmora Granito also sells sanitaryware, faucets and tile adhesives. Its product portfolio includes large-format GVT products and integrated stone technology tiles designed to resemble natural marble.
Chairman and Managing Director Bhavesh Varmora said the company plans to acquire a faucet manufacturing business with annual turnover capacity of about Rs. 100 crore. Varmora 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. The company is also considering a joint venture in South India after entering a similar arrangement in the northeast.
The IPO received bids for 0.08 times the shares available by September 22. Retail investors subscribed 0.14 times their allocated portion, while non-institutional investors subscribed 0.03 times. The qualified institutional buyer segment recorded no bids, excluding anchor investors, at that stage.
Brokerages offered different views on the issue. Ventura gave the IPO a ‘Subscribe’ rating, citing premium products and wider distribution. Swastika assigned a ‘Neutral’ rating because it saw limited valuation support for short-term listing gains.
The IPO lot size is 101 shares, requiring a minimum retail investment of Rs. 14,948 at the upper price. Allotment may take place on September 25, while Varmora Granito shares are scheduled to list on the NSE and BSE on September 29.
