India’s 64% Granite Exporter Diversifying In Quartz, Rare Earth Processing

India’s natural stone and mining export industry has seen remarkable evolution over the past few decades — and at the center of this transformation stands Midwest, a company that has redefined mining efficiency through its mine-to-market integration model. In this Midwest IPO review, we will not merely look at the IPO details — we will decode how Midwest actually earns its money, manages its operations, and sustains profitability.

In this, we’ll cover:

• Midwest’s four-decade-long legacy and market leadership,
• How its integrated business model operates across mining, processing, and exports,
• And why this structure gives the company a long-term competitive edge in the natural stone industry.

Midwest IPO review aims to teach readers how to evaluate a mining-based IPO through operational data, business structure, and profitability drivers — not just through financial statements.

Midwest IPO Review: Company Overview & Legacy

Midwest has been one of India’s foremost players in the dimensional natural stone industry for over 40 years. From granite blocks to processed slabs and quartz products, the company has built a vertically integrated operation that controls every step — from resource identification to global distribution.

Market Leadership

• Holds ~64% share in India’s Black Galaxy Granite exports (FY25).
• Accounts for 15.7% of national Absolute Black Granite production, cementing its dominance in the premium granite segment.
• Exported 44,992 cubic meters of Black Galaxy Granite in FY25, positioning itself as a key supplier to global distributors.

Operational Footprint

• 16 operational granite mines across Telangana and Andhra Pradesh.
• 2 granite processing facilities located at Chimakurthy and Ongole.
• 1 Diamond Wire manufacturing facility in Hyderabad, Telangana, ensuring in-house tool availability.
• 1 Quartz processing plant at Annangi Village, Andhra Pradesh, with Phase I capacity of 3,03,600 MTPA (launched Sept 2025) and plans to double capacity to 6,06,600 MTPA under Phase II.

Global Reach

Midwest serves clients across 17 countries and five continents, including: China, Italy, Sweden, Thailand, and emerging destinations such as Vietnam, the UAE, and Turkey.

Human Capital

As of June 2025, the company employed 1,326 personnel, including:

• 475 permanent employees,
• 822 contract workers, and
• 29 consultants.
  Mechanization and automation have allowed Midwest to increase output while optimizing manpower, resulting in better productivity and lower per-unit operating cost.

Midwest IPO Analysis: Business Model

The defining feature of Midwest’s success lies in its fully integrated mining and processing value chain. Unlike most competitors who depend on third-party suppliers, Midwest controls every stage — exploration, extraction, processing, and export — ensuring quality consistency, cost efficiency, and timely delivery.

A. Exploration to Extraction

• The company’s in-house geological and R&D teams use geo-physical and geo-chemical studies to identify viable deposits.
• Mining plans are approved after securing environmental clearances and lease permissions.
• Advanced equipment like Diamond Wire saws, pneumatic drills, and hydraulic excavators enable precision cutting with minimal waste and high recovery rates.

B. Processing Facilities

• Granite processing takes place at Chimakurthy and Ongole plants.
• FY25 output:
  • Chimakurthy – 295,663 sq. ft. at 12.69% utilization,
  • Ongole – 6,118 sq. ft. at 2.03% utilization.
• The relatively lower utilization is strategic — focusing on high-margin premium blocks rather than volume-heavy production.
• These facilities also process lower-grade granite blocks into sellable slabs, maximizing revenue potential from every mined stone.

C. Diamond Wire Manufacturing – Strategic Backward Integration

• Midwest’s Hyderabad facility manufactures Diamond Wires used for cutting granite and concrete.
• FY25 installed capacity: 2,00,000 meters; actual production: 1,66,137 meters; utilization: 83.06%.
• This facility not only meets in-house mining requirements but also serves the external market — generating INR 60.02 crore revenue in FY25.
• Result: Reduced dependency on imports, higher margins, and better control over tool quality.

D. Quartz Business Expansion

• Under subsidiary Midwest Neostone, the company has launched a Quartz Grit & Powder Processing Plant.
• IPO proceeds of INR 130.3 crore are allocated for Phase II expansion (to reach 6,06,600 MTPA).
• This diversification positions Midwest in the fast-growing engineered stone market, reducing dependence on natural granite cycles.

E. International Expansion

• Through subsidiaries in Sri Lanka — Midwest Heavy Sands and Trinco Mineral Sands — the company holds four exploration licenses for Heavy Mineral Sands (HMS) projects.
• Additionally, it owns coal assets in Mozambique (868 Mt measured reserves) via Midwest Africa LDA — but instead of exploiting them, Midwest plans to monetize these non-core assets, channeling capital back into high-margin stone, quartz and rare earth processing operations.

F. Control & Efficiency

• Midwest has implemented SAP ERP systems, fuel automation via RFID, and GPS-based equipment tracking across all mines.
• These digital tools allow real-time performance monitoring and tighter control over fuel consumption and maintenance.
• The result is evident — EBITDA margin improved from 17.8% (FY23) to 27.43% (FY25), a clear sign of efficiency-driven profitability.

Midwest IPO Analysis: Revenue Streams

Midwest’s growth story is powered by a diversified revenue mix that spans across Granite, Quartz, and Diamond Wire manufacturing. While Granite remains the company’s core strength, newer segments like Quartz and engineered stone are expanding Midwest’s footprint into higher-margin, future-ready businesses.

A. Segment-Wise Revenue Overview

Key Takeaways:

• Granite continues to dominate, contributing ~96% of FY 25 revenue.
• Diamond Wire, though small, grew fastest — signaling operational self-sufficiency turning profitable business line.
• The Quartz segment’s contribution will accelerate post Phase II expansion (FY 26–27 projection).

B. Export vs Domestic Mix

• Approximately 78–80 % of total sales come from exports — primarily to China, Italy, Sweden, and Thailand.
• This global orientation provides foreign-exchange gains and shields the company from regional demand fluctuations.
• At the same time, domestic sales (20–22 %) ensure consistent cash-flow stability through repeat B2B clients in the construction and infrastructure sectors.

C. Margin-Wise Segment Contribution

• Granite (Black Galaxy + Absolute Black): EBITDA margin between 26–28 %, aided by premium pricing and efficient extraction.
• Diamond Wire: Operating margin > 20 %, owing to import substitution and captive demand.
• Quartz: Still in its scale-up phase; margin expansion expected as Phase II doubles capacity and improves fixed-cost absorption.

Midwest IPO Review: Operational & Financial Performance

Midwest’s financial trajectory over FY 23–25 showcases steady top-line growth and remarkable improvement in profitability, reflecting strong cost control and capital efficiency.

A. Financial Highlights

Highlights:

• Revenue CAGR: 11.7 % over FY 23–25.
• PAT doubled from INR 54 Cr → INR 133 Cr in two years.
• EBITDA margin expanded by ~960 bps, proving the impact of automation, ERP integration, and self-manufactured inputs.
• Despite a modest rise in debt (for expansion), the coverage ratio > 8× reflects sound financial discipline.

B. Operational KPIs

Operational Efficiency Trends:

• Granite production grew 10.8 % YoY, supported by mechanized quarrying.
• Diamond Wire production surged 48 % YoY, proving backward integration success.
• Working-capital cycle improved to 120 days in FY 25 (vs 106 days FY 23) — a healthy stretch given rising export volume.

Midwest IPO Review: IPO Structure, Offer Details & Objectives

Midwest’s IPO is designed not just to raise capital, but to strengthen and scale its existing integrated ecosystem.

A. Offer Details

B. Offer for Sale Breakdown

This modest OFS indicates limited promoter dilution, preserving long-term management commitment — a positive indicator for stability.

C. Use of Proceeds

Analyst’s Interpretation: Each utilization head directly enhances operational scalability, sustainability, or capital efficiency.
None of the proceeds go toward unrelated diversification — reinforcing management focus on the core business.

D. Shareholding Pattern

The concentrated promoter holding implies strong management control, while inclusion of institutional investors like SVADHA India adds credibility and governance comfort.

Business Outlook – Growth, Expansion & ESG Advantage

Midwest’s next growth chapter is built around three strategic levers — diversification, digitalization, and sustainability.

A. Quartz Expansion – A High-Growth Adjacency

• The Quartz market is witnessing ~7–8 % global CAGR, driven by rising demand for engineered stones.
• Midwest’s Phase II Quartz Plant will double capacity to 6,06,600 MTPA, directly adding INR 250–300 Cr annual topline potential once fully operational (FY 27E).
• Quartz products offer higher gross margins (~35 %), providing natural earnings uplift.

B. Technology & Efficiency Edge

• SAP ERP, IoT sensors, and fuel-automation systems enable precise real-time monitoring of every mine and machine.
• Electric dump-trucks (to be deployed FY 26) will reduce diesel consumption by an estimated 20–25 %, enhancing ESG credibility while lowering opex.
• Diamond Wire manufacturing continues to deliver dual benefits — internal cost savings and external sales growth (FY 25: INR 16 Cr revenue).

C. Future Financial Visibility

• With Phase II Quartz, solar integration, and electric-fleet deployment, Midwest’s EBITDA margins could exceed 28 %+ by FY 27,
• Debt-to-equity expected to drop below 0.35× post-repayment,
• And ROCE likely to stabilize around 20 %+, reflecting capital-efficient growth.

Conclusion

Midwest’s IPO is not just a capital-raising exercise; it’s a strategic inflection point for an industry veteran ready to transform from a legacy granite exporter into a diversified, ESG-aligned materials company.

• Four decades of expertise,
• Strong balance sheet,
• Sustainable cost leadership, and
• Clear future visibility
  make Midwest one of the most fundamentally sound offerings of 2025 in the mid-cap industrial segment.

💬 In short: Midwest exemplifies how operational integration, sustainability, and prudent financial management can converge into a high-quality, scalable growth story. For investors seeking steady compounding in the industrial materials space — Midwest’s IPO offers a solid, long-term proposition.

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