Upcoming IPO: Sanathan Textile Sets Price Band Of Rs 305-321 For Rs 550 Crore Public Issue; Details Here

Sanathan Textile, a yarn manufacturer, is gearing up for its initial public offering (IPO), set to open for subscription on Thursday, December 19, and close on Monday, December 23. The company has fixed the price band for the IPO at Rs 305 to Rs Rs 321 per equity share, with the floor price and cap price being 30.50 times and 32.10 times the face value of Rs 10 per share, respectively. Anchor investors can begin bidding on Wednesday, December 18.

Key IPO Details

The Sanathan Textile IPO comprises a combination of a fresh issue and an offer for sale (OFS), aggregating to Rs 550 crore. Of this, Rs 400 crore will be raised through the fresh issue, while Rs 150 crore will be contributed by promoter-selling shareholders under the OFS.

Shareholders participating in the OFS include Paresh Vrajlal Dattani, Ajay Vallabhdas Dattani, Anilkumar Vrajdas Dattani, Dinesh Vrajdas Dattani, Vajubhai Investments Private Limited, Vallabhdas Dattani HUF, Sonali Ajaykumar Dattani, Dattani Dineshkumar Vrajdas HUF, Beena Paresh Dattani, and Anilkumar Vrajdas Dattani HUF. Investors can bid for a minimum of 46 shares per lot and in multiples thereafter.

Utilization of Funds

The company intends to allocate the proceeds from the fresh issue to repay certain borrowings, invest in its subsidiary for debt repayment, and address general corporate purposes.

About Sanathan Textile

Sanathan Textile is a key player in India's textile yarn industry, with a diversified product portfolio across polyester, cotton, and technical textile segments. According to a CRISIL report, the company holds a 1.7% market share in the Indian textile yarn industry by operating income as of fiscal 2024.

The company has over 3,200 active varieties of yarn products as of September 30, 2024. More than 45,000 stock-keeping units (SKUs) are currently in operation. A capacity to manufacture 14,000+ yarn varieties and 190,000+ SKUs for diverse end uses.

Sanathan Textile operates its manufacturing facility in Silvassa, which has a total installed capacity of 223,750 MTPA across its three verticals, polyester yarn products, cotton yarn products, and yarns for technical textiles and industrial applications.

Growth Potential

The Indian textile and apparel industry is poised for significant growth, with a projected CAGR of 6-7% between fiscal 2024 and fiscal 2028. This expansion is supported by rising domestic demand, projected to grow at a CAGR of 7-8%, and export growth expected at a CAGR of 4.5-5.5%.

Globally, the demand for yarn products is also anticipated to grow steadily, benefiting companies like Sanathan Textile, which offer a diverse and adaptable product portfolio.

IPO Management

DAM Capital and ICICI Securities are the book-running lead managers for this IPO, while KFin Technologies has been appointed as the registrar.