Sanathan Textiles Limited to Float IPO: Filed DRHP With SEBI

Sanathan Textiles Limited recently filed a draft red herring prospectus with the market regulatory Securities and Exchange Board of India (SEBI) to float an initial public offering (IPO), whereby the company is seeking to raise ₹800 crore. The said IPO will be a combination of a fresh issue and an offer for sale. The company will raise up to ₹500 crore from the fresh issue component and ₹300 crore from the offer for sale.

The company has selected DAM Capital Advisors Limited and ICICI Securities Limited as bookrunners and lead managers for the IPO and KFin Technologies Limited (formerly known as KFin Technologies Private Limited) as registrars of the issue.

Objective of the IPO

Fresh Issue

• The company will use the funds raised to repay and/ or prepay, in full or in part, certain borrowings it has made.
• The company will make investments in its subsidiary, viz. Sanathan Polycot Private Limited for funding its long-term working capital requirements;
• General corporate purposes.

Offer for Sale

The company will not receive any amounts raised from the offer-for-sale component. All the proceeds will be taken over by the selling shareholder.

Business Overview

Incorporated in 2021, Sanathan Textiles Limited is one of the few companies in India with a presence in the polyester, cotton, and technical textile sectors. Currently, all three yarn verticals are housed under a single corporate entity. This has helped its diversification into new segments, which, in turn, has helped the business serve a large number of customers across various sectors.

As of December 31, 2023, the company serves more than 2,800 active varieties of yarn products and more than 30,000 stock-keeping units (SKUs), and the capability to manufacture a diversified product portfolio of more than 14,000 varieties of yarn products and more than 190,000 SKUs that are used in various forms and for varied end uses.

The company’s products are manufactured at its facility located at Silvassa. It has scaled up its production in the past years. As of December 31, 2023, the company’s facility at Silvassa had a total installed capacity of 2,23,750 MTPA across the three yarn verticals.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.