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Issue Details / Capital History
The firm is popping out with its maiden ebook constructing route combo IPO price Rs. 708.02 cr. (of approx. 47839256 fairness shares on the higher cap). The IPO consists of contemporary fairness shares price Rs. 320 cr. (approx. 21621622 fairness shares on the higher cap) and an Offer for Sale (OFS) of 26217634 fairness shares (price Rs. 388.02 cr. on the higher cap). The firm has introduced a worth band of Rs. 140 – Rs. 148 per fairness shares of Rs. 2 every. The problem opens for subscription on September 22, 2026, and can shut on September 24, 2026. The minimal software to be made is for 101 shares and in multiples thereon, thereafter. Post allotment, shares might be listed on BSE and NSE. The problem constitutes 23.11% of the post-IPO paid-up fairness capital. From the online proceeds of the contemporary fairness problem, the corporate will make the most of Rs. 245.00 cr. for compensation/prepayment of sure borrowings of the group firms, and the remaining for normal company functions.
The three joint Book Running Lead Managers (BRLMs) to this problem are JM Financial Ltd., Goldman Sachs (India) Securities Pvt. Ltd., SBI Capital Markets Ltd., whereas KFin Technologies Ltd. is the registrar to the problem. JM Financial Services Ltd., SBICAP Securities Ltd., Investec Capital Services (India) Pvt. Ltd. are syndicate members.
After issuing complete fairness shares at par worth, the corporate has issued/transformed additional fairness shares within the worth vary of Rs. 4.00 – Rs. 293.42 per share (primarily based on Rs. 2 FV) between February 2013, and September 2026. It has additionally issued bonus shares within the ratio of 4 for 1 in August 2023.The common price of acquisition of shares by the promoters/promoting stakeholders is Rs. 2.45, Rs. 3.01, Rs. 4.36, and Rs. 74.82 per share.
Post-IPO, its present paid-up fairness capital of Rs. 40.88 cr. (204390203 fairness shares) will stand enhanced to Rs. 41.40 cr. (207011825 fairness shares). Based on the higher cap of the value band, the corporate is on the lookout for a market cap of Rs. 3063.78 cr.
On the monetary efficiency entrance, for the final three fiscals, the corporate has (on a consolidated foundation) posted a complete revenue/internet revenue, of Rs. 1472.58 cr. / Rs. 44.94 cr. (FY24), Rs. 1492.68 cr. / Rs. 30.99 cr. (FY25), and Rs. 1562.53 cr. / Rs. 55.09 cr. (FY26). Thus, it marked regular progress in its prime and backside strains for the reported intervals. Its contingent liabilities stood at Rs. 11.48 cr. as of March 31, 2026.
For the final three fiscals, the corporate has posted a median EPS of Rs. 2.49 (fundamental) and a median RoNW of 6.61%. The problem is priced at a P/BV of three.74 primarily based on its NAV of Rs. 39.52 as of March 31, 2026, and at a P/BV of two.99 primarily based on its post-IPO NAV of Rs. 49.42 per share on the higher cap.
If we attribute FY26 tremendous earnings to its post-IPO absolutely diluted paid-up fairness capital, then the asking worth is at P/E of 55.64. Based on FY25 earnings, the P/E stands at 99.33. The problem seems exorbitantly priced primarily based on its latest common efficiency.
For the reported intervals, the corporate has reported PAT Margins of three.05% (FY24), 2.06% (FY25), 3.53% (FY26), and RoCE margins of seven.95%, 6.32%, 9.89%, respectively, for the referred intervals.
The firm has not declared any dividends for the reported intervals of the supply doc. It has already adopted a dividend coverage in April 2025, primarily based on its monetary efficiency and future prospects.
Comparison with Listed Peers
As per the supply doc, the corporate has proven Kajaria Ceramics, Asian Granito, Orient Bell, as its listed friends. They are at present buying and selling at a P/E of 32.9, 116.0, and 27.5 (as of September 18, 2026). However, they aren’t actually comparable on an apple-to-apple foundation. This comparability seems to be an eyewash.
Varmora Granito Ltd. (VGL) gives a various vary of merchandise comprising tiles, together with glazed vitrified tiles (“GVT”), polished vitrified tiles (“PVT”) and ceramic tiles. It has constantly leveraged expertise to pioneer design and high quality developments within the business. For occasion, it has commercialized built-in stone expertise (“IST”) in 2024, with a expertise partnership with SACMI Imola S.C. (“SACMI”), an Italian tile gear supplier.
According to the Technopak Report, the Indian home tiles market has witnessed vital progress over the previous years. Valued at roughly Rs. 360.0 billion in Fiscal 2019, the Indian home tiles market expanded to Rs. 531.0 billion by Fiscal 2025, rising at a CAGR of 6.7% (Source: Technopak Report). The Indian home tiles market is additional anticipated to develop to Rs. 765.2 billion by Fiscal 2030, representing a CAGR of 8.4% from Fiscals 2026 to 2030 (Source: Technopak Report).
Premiumization throughout the Indian tiles business is clear – in Fiscal 2026, GVT accounted for 36.5% of the tile business income in India and is anticipated to achieve 45.5% by Fiscal 2030 and its market by worth grew the quickest at a CAGR of 10.7% between Fiscals 2019 and 2025 as in comparison with ceramic tiles and PVT which have grown at a CAGR of 5.6% and 4.0%, respectively, throughout the identical interval (Source: Technopak Report). Moreover, GVT additionally has a 15-30% larger realization than ceramic and PVT tiles and altering product combine in favour of GVT helps producers enhance their realization and gross margins (Source: Technopak Report).
VGL’s numerous product choices comprise a variety of high-quality, sturdy and aesthetic tiles. Its major focus is on promoting premium merchandise resembling GVT and technical merchandise which represented 84.19%, 78.71% and 75.37% of its income from operations from tiles in Fiscals 2026, 2025 and 2024, respectively. This underscores its concentrate on growing and promoting premium merchandise. This has additionally pushed an enchancment in its Gross Margin from 35.26% in Fiscal 2024 to 37.92% in Fiscal 2026.
To maintain management in innovation and to keep up management over product high quality and prices effectivity, 81.72% of VGL’s income from operations was generated from merchandise manufactured in-house in Fiscal 2026. As of date of this Red Herring Prospectus, it has eight strategically positioned manufacturing amenities (operated by means of the Company and Subsidiaries) within the Morbi cluster in Gujarat.
In addition to product innovation and premiumization, it has established a deep retail distribution footprint, notably in India. The firm sells merchandise by means of a multi-channel distribution community comprising business-to-consumer (“B2C”) retail channels, which incorporates 305 unique model retailers (“EBOs”) and 2758 multi model retailers (“MBOs”) (collectively, known as “Dealers”) unfold throughout India and out of doors India, as of March 31, 2026, and business-to-business (“B2B”) channels, varied builders, contractors, builders and authorities empanelment.
VGL’s branding and advertising and marketing efforts emphasize the superior specs, aesthetics, purposeful attributes and expertise that’s used within the manufacturing of its merchandise. The firm undertakes varied above-the-line (“ATL”) and below-the-line (“BTL”) commercial and digital advertising and marketing campaigns throughout numerous channels (together with social media, information channels, cinema, TV platforms and outside commercial) to reinforce model consciousness. It additionally bolsters gross sales and model recognition by internet hosting product launch occasions, collaborations with recognised builder networks (resembling Confederation of Real Estate Developers’ Associations of India (“CREDAI”)) and internet hosting stalls at exhibitions in addition to by establishing an influencer community comprising architects, builders and contractors (“ABCs”). It believes the standard, vary and purposeful attributes of merchandise stay the most important endorsement for its model. As of March 31, 2026, it had 1153 workers on its payroll and extra 1575 contractual employees in varied departments.
Merchant Banker’s Track Record
The three BRLMs related to this problem has dealt with 80 IPOs within the final three fiscals and out of which 25 IPOs closed beneath the problem worth on itemizing date.
Conclusion
VGL is without doubt one of the main number of tiles having numerous vary and has premiumise its merchandise underneath a well known model “Varmora”. The firm has properly diversified product vary and a largest advertising and marketing community. It marked marginal progress in its prime strains, and suffered a setback in backside line for FY25. Based on its latest common monetary knowledge, the problem seems exorbitantly priced. Only well-informed/money surplus buyers might park reasonable funds for long run.
Dilip Davda is a veteran monetary journalist related to the Indian inventory market since 1978. He has been contributing to print and digital media on capital markets, insurance coverage, and finance since 1985.
He is widely known for reviewing public points and non-convertible debentures (NCDs) within the major market. Drawing on over three many years of market expertise and shut interplay with service provider bankers, his opinions concentrate on detailed basic and monetary evaluation of firms, with a particular emphasis on SME public points.
Disclaimer: The data supplied herein is solely for academic and informational functions and doesn’t represent a proposal, solicitation, or advice to purchase or promote any securities. Readers are suggested to seek the advice of a professional monetary advisor earlier than making any funding choices. Investments within the securities market are topic to market dangers. The creator doesn’t intend to spend money on the securities mentioned.
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