The Sanathan Textiles IPO is set to open for bidding on December 19, 2024, offering investors an opportunity to invest in one of India’s leading manufacturers of polyester and cotton yarn. The IPO seeks to raise a total of ₹550 crore through a combination of a fresh share sale and an offer-for-sale (OFS). Here’s a detailed look at the IPO, its objectives, and the company’s financial performance.
Key Details of Sanathan Textiles IPO
| Particulars | Details |
|---|---|
| IPO Dates | December 19-23, 2024 |
| Price Band | ₹305-321 per share |
| Lot Size | Minimum 46 shares and multiples thereafter |
| Issue Size | ₹550 crore |
| Fresh Issue | ₹400 crore |
| OFS | ₹150 crore |
| Anchor Book Opening | December 18, 2024 |
| Listing Date | December 27, 2024 |
| Market Capitalization | Approx. ₹2,700 crore |
| Stock Exchanges | BSE and NSE |
| Lead Managers | Dam Capital Advisors, ICICI Securities |
| Registrar | Kfin Technologies Limited |
Company Overview: Sanathan Textiles
Incorporated in 2005, Sanathan Textiles is a leading manufacturer of polyester yarn and a global supplier of cotton yarn. The company’s business spans:
- Polyester Yarn: Used in apparel and home textiles.
- Cotton Yarn: Supplied globally for diverse applications.
- Technical Textiles: Products for automotive, healthcare, construction, sports, and outdoor activities.
As of June 30, 2024, the company had:
- 925 distributors across 7 countries, including India, Argentina, Germany, and Israel.
- 3,200+ active yarn varieties and over 45,000 SKUs.
IPO Objectives
The funds raised through the IPO will be utilized for:
- Repayment or Prepayment:
- Reducing certain borrowings availed by the company.
- Investment in Subsidiary:
- Strengthening Sanathan Polycot.
- General Corporate Purposes:
- Supporting overall business growth and operations.
- Proceeds from OFS:
- Directed toward selling shareholders.
Financial Performance
| Period | Net Profit (₹ crore) | Revenue (₹ crore) |
|---|---|---|
| Q1 FY25 (June 2024) | ₹50.07 | ₹787.76 |
| FY24 (March 2024) | ₹133.85 | ₹2,979.80 |
Sanathan Textiles has demonstrated consistent profitability, supported by its diversified product portfolio and global presence.
Allocation for Investors
| Category | Allocation |
|---|---|
| Qualified Institutional Buyers (QIBs) | 50% |
| Non-Institutional Investors (NIIs) | 15% |
| Retail Investors | 35% |
Why Should You Consider This IPO?
- Market Leader:
- A strong presence in polyester and cotton yarn manufacturing.
- Diversified applications across industries such as automotive and healthcare.
- Global Reach:
- Robust distribution network in 7 countries.
- Solid Financials:
- Consistent growth in revenue and profits.
- Growth Potential:
- Funds raised will support debt reduction and expansion, positioning the company for future growth.
- Attractive Valuation:
- Market capitalization of approximately ₹2,700 crore suggests room for growth in a competitive textile sector.
Important Dates
| Event | Date |
|---|---|
| Anchor Book | December 18, 2024 |
| IPO Opening | December 19, 2024 |
| IPO Closing | December 23, 2024 |
| Listing Date | December 27, 2024 |
Conclusion
The Sanathan Textiles IPO offers a promising opportunity for investors seeking exposure to India’s growing textile sector. With its strong global presence, robust financials, and strategic use of IPO proceeds, the company is well-positioned for long-term growth. Investors should carefully evaluate the price band, allocation, and financial performance before making their investment decision.
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Disclaimer
This article is for informational purposes only and does not constitute financial advice. Please consult a financial advisor before making investment decisions.
