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Varmora Granito

• Varmora Granito is coming out with a 100% book building; initial public offering (IPO) of 4,90,74,776 shares of face value Rs 2 each in a price band Rs 140-148 per equity share.
• Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
• The issue will open for subscription on September 22, 2026 and will close on September 24, 2026.
• The shares will be listed on both BSE and NSE.
• The face value of the share is Rs 2 and is priced 70.00 times of its face value on the lower side and 74.00 on the higher side.
• Book running lead managers to the issue are JM Financial, Goldman Sachs (India) Securities and SBI Capital Markets.
• Compliance officer for the issue is Nilesh Sharma. 

Profile of the company

Varmora Granito offers a diverse range of products comprising tiles, including glazed vitrified tiles (GVT), polished vitrified tiles (PVT) and ceramic tiles. It has consistently leveraged technology to pioneer design and quality advancements in the industry. For instance, it has commercialized integrated stone technology (IST) in 2024, with a technology partnership with SACMI Imola S.C. (SACMI), an Italian tile equipment provider.

The company’s diverse product offerings comprise a wide range of high-quality, durable and aesthetic tiles. Its primary focus is on selling premium products such as GVT and technical products which represented 84.19%, 78.71% and 75.37% of its revenue from operations from tiles in Fiscals 2026, 2025 and 2024, respectively. This underscores its focus on developing and selling premium products. This has also driven an improvement in its Gross Margin from 35.26% in Fiscal 2024 to 37.92% in Fiscal 2026.

To sustain its leadership in innovation and to maintain control over product quality and costs efficiency, 81.72% of its revenue from operations was generated from products manufactured in-house in Fiscal 2026. The company has eight strategically located manufacturing facilities (operated through the company and Subsidiaries) in the Morbi cluster in Gujarat. In addition to product innovation and premiumization, it has established a deep retail distribution footprint, particularly in India. It sells its products through a multi-channel distribution network comprising business-to-consumer (B2C) retail channels, which includes 305 exclusive brand outlets (EBOs) and 2,758 multi brand outlets (MBOs) spread across India and outside India, as of March 31, 2026, and business-to-business (B2B) channels, various builders, contractors, developers and government empanelment.

Proceed is being used for: 

• Repayment/ pre-payment, in full or in part, of all or certain outstanding borrowings and accrued interest thereon availed by: a) the company; and b) its wholly-owned subsidiaries namely Covertek Ceramica Private Limited and Varmora Sanitarywares Private Limited (formerly, Varmora Sanitarywares LLP), through investment in such Subsidiaries
• General corporate purposes

Industry overview

The flooring market in India is intricately linked to the growth of the real estate sector, reflecting the overall expansion and modernization of residential and commercial spaces. As urbanization accelerates and disposable incomes rise, there is a growing demand for various flooring materials that enhance the aesthetic and functional aspects of the real estate property. The flooring market in India was valued at Rs 1,358.3 billion in Fiscal 2025, it is estimated to grow at a rate of 3.5% y-o-y to reach Rs 1405.3 billion in Fiscal 2026. The market is further projected to grow at a CAGR of 5.4% from Fiscal 2026 to Fiscal 2030, reaching Rs 1,732.0 billion by Fiscal 2030. It comprises five segments- tiles, vinyl, wooden/laminate, concrete and stone (including marble, granite, limestone, and others). Tiles are the fastest growing segment in the flooring market due to their affordability, durability, versatility, and low maintenance, and their share in the flooring market is expected to reach 30.9% by Fiscal 2030, from 28.4% in Fiscal 2026.

The Indian domestic tiles market has witnessed significant growth over the past years. Valued at approximately Rs 360.0 billion in Fiscal 2019, the Indian domestic tiles market expanded to Rs 531.0 billion by Fiscal 2025, growing at a CAGR of 6.7%. Projections suggest that the Indian domestic tiles market is further expected to grow to Rs 765.2 billion by Fiscal 2030, representing a CAGR of 8.4% from Fiscal 2026 to 2030. This expansion is driven by rapid growth of the real estate sector, enabled by structural factors such as regulatory streamlining, govt. spends on infrastructure and public utilities, increasing urbanisation, and rising disposable incomes. Further, technological advancement in tile production has resulted in various types of surfaces, characteristics, and designs, thus increasing the use cases.

Meanwhile, the Indian sanitary and bathware market has experienced steady growth over the last six years, increasing from Rs 213.0 billion in Fiscal 2019 to Rs 331.0 billion in Fiscal 2025, at a CAGR of approximately 7.6%. In Fiscal 2026, the market expanded by 7.9% year-on-year (YoY) to Rs 357.0 billion and is projected to reach Rs 522.0 billion by Fiscal 2030, at CAGR of about 10.0%. The sanitary and bathware market is divided into two main categories: sanitaryware (toilets, basins, etc.) and bathware (faucets, showers, bathtubs, etc.). In Fiscal 2026, the sanitaryware segment accounted for approximately 38.5% of the market while the bathware segments accounted for approximately 61.5% of market share. The share of bathware is projected to grow faster due to low penetration and increasing renovation frequency as compared to sanitaryware market which is a more penetrated market. Sanitaryware market is expected to grow at rate of 7.4% from Fiscal 2026 to Fiscal 2030, while the Indian bathware market valued at Rs 219.6 billion in Fiscal 2026 is projected to grow at a CAGR of approximately 11.5% between Fiscal 2026 to Fiscal 2030 to reach Rs 339.2 billion by Fiscal 2030.

Pros and strengths 

Well position to capture tile industry growth: The company’s revenue from operations grew at a CAGR of 2.65% from Rs 14,354.81 million in Fiscal 2024 to Rs 15,124.64 million in Fiscal 2026. The company is well-positioned to capture the growth in the tiles market, premiumization of customer demand and shift towards branded players. Its diverse product offerings with key focus on premium products (such as GVT), continued innovation, pan India distribution channels, effective sales and marketing initiatives, advanced manufacturing capabilities and robust governance mechanisms enable it to leverage these industry trends to maintain and enhance its competitive market position and growth.

Diversified product portfolio with premium tile focus: The company’s product portfolio included over 3,500 tiles stock-keeping units (SKUs), as of March 31, 2026, which include GVT and technical products, PVT and ceramic tiles. It has also significantly differentiated its product offerings. The company’s total number of SKUs for tiles was 4,289, 4,177 and 4,009 as of March 31, 2026, 2025 and 2024, respectively. IST produces marble-like products across four surfaces. It offers 20 different surface types of tiles for various applications. It places key focus on developing premium and quality products based on industry trends and customer demands, such as GVT, which offers superior quality, design, durability and aesthetics. GVT commands higher realizations and profit margins, and is becoming a more preferred option for retailers in the market.

Driving product innovation through R&D and design: Premiumization in recent times in India have driven the demand for innovative tile designs and large-format tiles that combine aesthetics and functionality, prompting manufacturers to be much more innovative than ever before. The company’s continued focus on innovation enables it to offer an attractive product portfolio based on latest designs and advanced technology that are curated to serve evolving customer needs. It has demonstrated a strong focus on investing in innovation, particularly through the adoption of technologies and sustainable practices, primarily in GVT. It has a dedicated R&D team, comprising 17 members as of March 31, 2026, that drives its innovation initiatives. Further, as of March 31, 2026, it has a team of 20 skilled designers, who explore global trends to integrate fresh ideas in its product designs. The company’s capabilities have enabled it to consistently introduce new product designs and concepts for customers.

Strong manufacturing footprint in Morbi: The company operates eight manufacturing facilities strategically located in Morbi, Gujarat, India. Morbi, Gujarat, is India’s tile hub, contributing 90% of the country’s tile production, as of January 2026. In Fiscals 2026, 2025 and 2024, 81.72%, 78.55% and 66.83%, respectively, of its revenue from operations from products were manufactured in-house. This enables it to maintain end-to-end control of its value chain and ensure quality production standards as well as help in increasing its margins. In Fiscal 2024, it expanded its network with the establishment of two additional manufacturing facilities in the Morbi region, which provides it with advanced technology and additional production capacity. These facilities have added a capacity of 17.76 million square meters (40.55% of its total installed capacity, as of March 31, 2026).

Risks and concerns

Reliance on dedicated manufacturing facilities: The company is dependent on its manufacturing facilities for a significant portion of its revenues (81.72% of its total revenue from operations in Fiscal 2026). Further, certain of its products are produced at dedicated manufacturing facilities. Any delay in production at, or shutdown of, or any interruption in these manufacturing facilities may significantly and adversely affect its business, financial condition, cash flows and results of operations.

Revenue concentration in GVT and technical products: The company depends on its sale of tiles and in particular, GVT and technical products, for a significant portion of its revenues. The company has garnered 73.98%, 69.56% and 65.54% of its total revenue from sale of GVT and technical products in FY26, FY25 and FY24 respectively. Any negative trend or downturn in the tiles market (particularly GVT) and other markets that it caters to (such as bathware), due to reasons such as consumer demand, consumer confidence, disposable income levels, employment levels, changes in national and international trade policies, geopolitics and trade tariffs, changes in government policies, environmental, health and safety regulations, could result in loss of business or reduction in the volume of business from customers in these industries.

High dependence on B2C retail and franchisees: The company has an extensive retail distribution network and derives a significant portion of its revenue from operations from its B2C retail chain (comprising exclusive brand outlets (EBOs) and multi brand outlets (MBOs)) (accounting for 66.80% of its total domestic sales in Fiscal 2026). It operates all its EBOs and MBOs through franchisees and any non-performance by its franchisees may adversely affect its business, results of operations and financial condition.

Dependence on key suppliers for raw materials: The company’s operations are subject to volatility in the supply and pricing of raw materials and packing materials. It is also dependent on its top suppliers for the supply for certain raw materials (top 10 suppliers contributed to 8.10% of its total expenses in Fiscal 2026). Any loss of suppliers or interruptions in the timely delivery of supplies or price escalations could have an adverse impact on its business, financial condition, cash flows and results of operations.

Outlook

Varmora Granito is engaged in the business of manufacturing and marketing ceramic and vitrified tiles. The company’s product portfolio includes a wide range of tiles across formats such as glazed vitrified tiles (GVT), polished vitrified tiles (PVT), and ceramic tiles. As of March 31, 2025, the company’s distribution network covered 949 cities across 27 states and union territories in India. The product portfolio included more than 3,500 stock-keeping units (SKUs) as of March 31, 2025. On the concern side, all the company’s revenues are attributable to manufacturing facilities situated in Morbi, Gujarat. Any disruption in the Morbi region, may significantly and adversely affect its business, financial condition, cash flows and results of operations. Moreover, the company operates in highly competitive markets in each of its product categories and an inability to compete effectively may adversely affect its business, financial condition, cash flows and results of operations.

The issue has been offering 4,90,74,776 shares in a price band of Rs 140-148 per equity share. The aggregate size of the offer is around Rs 687.05 crore to Rs 726.31 crore based on lower and upper price band respectively. Minimum application is to be made for 101 shares and in multiples thereof thereafter. On performance front, the company’s revenue from operations increased by 4.59% from Rs 14,460.29 million in Fiscal 2025 to Rs 15,124.64 million in Fiscal 2026 primarily on account on increase in sale of tiles. Moreover, the company’s profit for the year significantly increased by 79.03% from Rs 307.73 million in Fiscal 2025 to Rs 550.93 million in Fiscal 2026.

Meanwhile, the company has categorized the regions in India into core and emerging markets based on an assessment of its presence and distribution network. In the western and northern regions of India (i.e. its core markets), the company intends to strengthen its existing relationships by converting MBOs to EBOs, expanding the range of product offering with new surface launches and build new strategic relationships, such as marble dealers, to sell its new launched IST products. Further, its focus on premiumisation will drive realization growth, allowing it to offer higher-value products that meet the evolving preferences of its customers. This approach will not only enhance its revenue streams but also support its expansion into core markets by attracting a more affluent customer base, improving brand perception, and driving innovation. It also intends to strengthen its direct sales efforts, with a particular emphasis on cultivating strong relationships with key accounts and government agencies to secure contracts for large housing projects and repeat business. Additionally, it aims to improve its logistics and warehousing operations to guarantee timely and cost-effective delivery of products. The company’s advanced capabilities together with industry tailwinds, provide it significant headroom to drive productivity across India.