IPO closes on 24 Sep'26
Varmora Granito Limited
Minimum Investment
₹ 14,948 / 101 shares
Our Verdict:
Neutral
- Varmora Granito is India's second-largest tiles manufacturer by installed capacity, but its FY26 PAT margin of just 3.5% (on ₹1,562.53cr revenue) looks thin next to its scale, and profit growth has been inconsistent — PAT actually fell from ₹44.94cr (FY24) to ₹30.77cr (FY25) before recovering to ₹55.09cr (FY26).
- At the upper price band, the post-issue P/E works out to roughly 60x FY26 earnings — well above listed peers Kajaria Ceramics (~40x) and Somany Ceramics (~29x), leaving little margin of safety unless growth accelerates meaningfully.
- Revenue mix has grown increasingly concentrated: GVT and technical/IST products made up ~74% of FY26 revenue, and in-house manufacturing rose from 66.83% (FY24) to 81.72% (FY26), raising dependence on a narrower product and process base.
About the company
Founded in
18 Nov'03
Managing director
Bhavesh Vallabhdas Varmora
- Varmora Granito Limited is a Morbi, Gujarat-based manufacturer of ceramic and vitrified tiles, including Glazed Vitrified Tiles (GVT) and technical/Isostatic (IST) products, sold under the Varmora brand.
- The company operates across multiple manufacturing units, with a growing share of GVT and technical tile products that typically command better realizations than standard ceramic tiles.
- Katsura Investments (a Carlyle-backed entity) is selling shares worth up to ₹388.02 crore via the Offer for Sale, alongside a ₹320 crore Fresh Issue by the company.
- Promoters: Bhavesh Vallabhdas Varmora and other members of the Varmora family/promoter group
STRENGTHS
- Scale in Tiles Manufacturing: One of India's larger tile manufacturers by installed capacity, with a diversified product mix spanning ceramic, GVT and technical/IST tiles under the established Varmora brand.
- Rising Share of Higher-Value Products: GVT and technical products together accounted for ~73.98% of FY26 revenue, up from prior years, reflecting a shift toward products that generally carry better margins than commodity ceramic tiles.
- Growing In-House Manufacturing: In-house manufacturing rose from 66.83% of revenue in FY24 to 81.72% in FY26, reducing reliance on third-party job-work arrangements over time.
- Revenue Growth Across FY24–FY26: Revenue increased from ₹1,472.58 crore in FY24 to ₹1,562.53 crore in FY26, with FY26 PAT of ₹55.09 crore recovering sharply from a FY25 dip.
- Established Distribution Network: Sells through an established dealer/distributor network built over the company's operating history, supporting pan-India reach for its tile products.
RISK FACTORS
- Single-Region Manufacturing Concentration: 100% of manufacturing capacity is located in Morbi, Gujarat, so any regional disruption — power outages, water shortages, natural disasters or local regulatory action — could affect the entire production base at once.
- Product Concentration in GVT/Technical Tiles: With ~74% of FY26 revenue from GVT and technical/IST products, any slowdown in demand or pricing for this specific category would disproportionately affect overall revenue.
- Single-Facility Dependence for IST Products: Technical/IST products are manufactured solely at one dedicated facility (Varmora Unit 2), so any disruption at that specific unit would directly impact this higher-value product line.
- History of Natural-Disaster Disruption: Cyclone Biparjoy disrupted operations for roughly three weeks in FY24, illustrating the company's exposure to weather events given its single-region manufacturing base.
- Thin Margins Relative to Valuation: FY26 PAT margin of ~3.5% is modest for a business commanding a post-issue P/E of ~60x, and FY25 PAT fell year-on-year before recovering in FY26, indicating some earnings volatility.
Financials
All Values are in Cr.
Issue details
Issue type
Mainboard
Issue size
₹ ₹708.02 crore
Fresh Issue
₹ ₹320 crore
OFS
₹ ₹388.02 crore
Price range
₹ 140 - 148
Lot size
101 shares
Issue Objective
- Net proceeds from the Fresh Issue of up to ₹320 crore are proposed to be used for repayment/prepayment of certain borrowings, funding capital expenditure, and general corporate purposes. The Offer for Sale portion of up to ₹388.02 crore, comprising shares sold by Katsura Investments, will not accrue to the company.
Dates
Bidding open
22 Sep'26
Bidding close
24 Sep'26
Allotment date
25 Sep'26
Refund date
26 Sep'26
Listing
29 Sep'26
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
Retail individual investors
>35%
Read the Offer Document (PDF)
© 2026 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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