The Gujarat-based ceramic and vitrified tiles manufacturing company, Varmora Granito, concluded its initial public offering on September 24 with 30% subscription as of 10:20 am on the final day. The ₹708.02 crore IPO received bids for 1,02,88,264 shares against 3.39 crore shares on offer. Retail investors led the demand with their portion subscribed at 46%, while the non-institutional investor (NII) category saw 19% subscription. The issue will remain open until September 24 with a price band of ₹140-148 per share. The minimum lot size is 101 shares, meaning retail investors need to invest at least ₹14,948 at the upper end of the price band. In the grey market, the IPO is currently commanding zero GMP, indicating expectations of a flat listing performance.
The IPO has drawn significant concerns over its steep 60.7x P/E valuation at the upper price band of ₹148 per share, despite the company's pivot towards higher-margin Glazed Vitrified Tiles (GVT) products. As per ET Now, this valuation is 50% higher than established industry leader Kajaria Ceramics, which trades at 40.27x P/E, and 28.55x P/E for Somany Ceramics. The problem lies in seeking market-leader pricing while reporting lower financial metrics, with Varmora Granito's ROE of 7.79% significantly below Kajaria Ceramics' 15.89% ROE. The market leader's ROCE of 23.87% is more than double Varmora Granito's 9.89% ROCE. Additionally, out of the reported ₹55.09 crore net profit in FY26, almost ₹50 crore was driven by Other Income including export incentives, government subsidies, and interest income, raising questions about sustainable profitability.
The IPO witnessed a slow start on the first day of bidding, with total subscription jumping 75% intra-day from 0.04x to 0.07x as of 13:15 pm. Retail investors were the primary drivers of demand throughout the day, while institutional participation remained absent. The standout move was in the NII (bHNI) category, which doubled from 0.04x to 0.08x during trading hours. The complete absence of QIB interest on Day 1 raises questions about whether the company will need to lower the price band or offer additional incentives to attract institutional buyers by Day 3. The zero institutional subscription may also impact Varmora Granito's post-listing liquidity and price stability given the reliance on retail demand.
In the grey market, Varmora Granito shares were commanding zero GMP on the morning of September 24, as per Investorgain, showing a sharp decline from the 6% premium recorded earlier. This cooling in grey market premium indicates a modest listing premium for the stock, suggesting a relatively flat listing performance compared to earlier expectations. The grey market premium serves as an unofficial indicator based on activity in the grey market and can change before listing, with no guarantee of actual listing price or post-listing returns.
Ahead of the public issue, Varmora Granito raised ₹212.4 crore through its anchor book on September 21. The company allotted 1.43 crore equity shares to institutional investors at ₹148 per share, the upper end of the IPO price band. The anchor participation included prominent investors such as Goldman Sachs, Societe Generale, 360 ONE, India Acorn Fund, Turnaround Opportunities Fund, Bharti AXA Life Insurance, LC Pharos Multi Strategy Fund, and BNP Paribas Financial Markets, along with domestic mutual funds including ICICI Prudential AMC, Bandhan Mutual Fund, Motilal Oswal AMC, JM Financial Mutual Fund, and Union AMC. Of the ₹320 crore fresh issue, Varmora Granito plans to use ₹245 crore towards repayment of debt, with the remaining amount for general corporate purposes.
Varmora Granito reported revenue of ₹1,512.46 crore in FY26, compared with ₹1,446.03 crore in FY25, according to available financial data. Its profit after tax was reported at ₹55.09 crore in FY26, compared with ₹30.77 crore in FY25, marking a 79% increase. The company's EBITDA increased to ₹221.56 crore in FY26 from ₹198.29 crore in FY25. The company also reduced its total borrowings from ₹505.16 crore in FY25 to ₹357.95 crore in FY26. In FY26, around 81.72% of its revenue came from in-house manufactured products, while GVT and technical tiles accounted for around 84% of tile revenue. The company operates eight manufacturing facilities in the Morbi cluster of Gujarat with a distribution network covering 305 exclusive brand outlets and 2,758 multi-brand outlets across India and overseas. As of March 2026, Varmora Granito had 1,153 permanent employees and has adopted Integrated Stone Technology (IST) through a technology partnership with Italy-based SACMI. The company also has a focus on renewable energy, with 16.22 MW of wind and solar capacity.
