Sanathan Textiles, a leading polyester yarn manufacturer and global supplier of cotton yarn, is set to launch its Initial Public Offering (IPO) on Thursday, December 19. The price band for the IPO has been fixed at Rs 305-321 per equity share. Investors can bid for a minimum of 46 equity shares and in multiples thereafter. The three-day bidding process will conclude on Monday, December 23.

IPO Details

The company aims to raise Rs 550 crore through the IPO, which includes a fresh issue of Rs 400 crore and an offer-for-sale (OFS) of Rs 150 crore by the promoters and promoter group entities. The anchor book will open a day prior, on Wednesday, December 18.

Sanathan Textiles plans to utilize the net proceeds from the fresh issue to repay or prepay certain borrowings, invest in its subsidiary, Sanathan Polycot, and meet general corporate expenses. Proceeds from the OFS will go to the selling shareholders.

Business Overview

Established in 2005, Sanathan Textiles operates across three verticals: polyester yarn products, cotton yarn products, and technical textiles used in industries such as automotive, healthcare, construction, sports, and outdoor activities.

As of June 30, 2024, the company had over 925 distributors across seven countries, including India, Argentina, Singapore, Germany, Greece, Canada, and Israel. It boasted a portfolio of more than 3,200 active yarn varieties and over 45,000 stock-keeping units (SKUs) as of September 30, 2024.

Financial Performance

For the quarter ended June 30, 2024, Sanathan Textiles reported a net profit of Rs 50.07 crore on a revenue of Rs 787.76 crore. For the financial year 2023-24, the company recorded a net profit of Rs 133.85 crore on revenue of Rs 2,979.8 crore.

IPO Allocation and Market Capitalization

The IPO has reserved 50% of the net offer for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 35% for retail investors. Post-listing, the company is expected to achieve a market capitalization of approximately Rs 2,700 crore.

Listing and Lead Managers

The shares will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on Friday, December 27. Dam Capital Advisors (formerly IDFC Securities) and ICICI Securities are acting as the book-running lead managers for the IPO, while KFin Technologies Limited is the registrar.

Sanathan Textiles’ IPO provides an opportunity for investors to participate in a growing company with a strong presence in the domestic and international yarn markets.