Sanathan Textiles Ltd.'s Rs 550-crore initial public offering, which opened on Thursday, consists of a fresh issue of Rs 400 crore and an offer for sale of Rs 150 crore.
The price band for the IPO has been set between Rs 305 and Rs 321 per share. The market value at the upper end of the price band is Rs 2,709 crore.
The yarn manufacturing company raised Rs 165 crore from anchor investors a day ahead of the IPO launch, allotting 51.4 lakh shares at Rs 321 apiece to 20 anchor investors.
DAM Capital Advisors Ltd. and ICICI Securities Ltd. are the book-running lead managers for the issue and KFin Technologies Ltd. is the registrar for the offer, according to the draft red herring prospectus.
The allotment is expected to be finalised on Dec. 24. The tentative listing date has been fixed as Dec. 27.
Sanathan Textiles IPO Details
Issue opens: Dec. 19.
Issue closes: Dec. 23.
Issue price: Rs 305–321 per share.
Offer for sale: Rs 150 crore.
Fresh issue: Rs 400 crore.
Total issue size: Rs 550 crore.
Lot size: Minimum 46 shares.
Use Of Proceeds
Repayment and/or pre-payment, full or part, of certain borrowings availed by the company.
Investment in the subsidiary Sanathan Polycot Pvt. for repayment and/or pre-payment, in full or part, of certain borrowings.
General corporate purposes.
Business
Sanathan Textiles operates across the polyester, cotton, and technical textile segments, which find application in multiple end-use segments like automotive, healthcare, construction, sports and outdoor, and protective clothing sectors. It holds a 1.7% market share in India's overall textile yarn industry as of the last financial year, according to Crisil.
All three yarn divisions are integrated within a single corporate structure. The company offers an extensive portfolio of over 3,200 active yarn varieties, with a strong focus on value-added products like dope-dyed, superfine/micro, functional, industrial, and technical yarns, as well as cationic dyeable and specialty yarns.
Financials
In fiscal 2024, revenue from operations was Rs 2,957 crore, compared to Rs 3,329 crore in fiscal 2023 and Rs 3,185 crore in fiscal 2022. The Ebitda stood at Rs 226 crore in fiscal 2024 in comparison to Rs 259 crore in fiscal 2023 and Rs 537 crore in fiscal 2022.
Similarly, net profit was Rs 134 crore, while it was Rs 152 crore in fiscal 2023 and Rs 355 crore in fiscal 2022.
Sanathan Textiles IPO: Key Risks
Sanathan Textiles do not have firm commitments or long-term supply agreements with any of the customers and, instead, rely on purchase orders.
Purchase orders placed by customers include provisions relating to liquidated damages and specific performance in case of delay or default in delivery of our products.
The company also does not enter contracts for a specific term with its customers.
Sanathan Textiles IPO GMP Today
The grey market premium of Sanathan Textiles IPO was Rs 40 as of 7:59 a.m. on Dec. 19, according to InvestorGain. This implies that the shares of the company will likely list at Rs 361 apiece, indicating a 12.46% premium to the upper end of the price band.
Note: The GMP is not an official price quote for the stock and is based on speculation.
Watch IPO Adda
Disclaimer: Investments in initial public offerings are subject to market risks. Please consult with financial advisors and read red herring prospectus thoroughly before placing bids.
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