IPO Alert: Sanathan Textiles To Raise ₹800 Crore

Sanathan Textiles Limited is one of the few companies in India with a presence in the polyester, cotton, and technical textile sectors. It has filed the draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) to float an initial public offering (IPO) to raise ₹800 crore from the public. Sanathan Textiles IPO comprises a fresh issue of ₹500 crore and ₹300 crore from the offer for sale.

Purpose of Sanathan Textiles IPO

Fresh Issue

The company would use the fresh issue proceeds of ₹500 crore for the following:

• Repayment and/ or prepayment, in full or part, of certain borrowings availed by our Company;
• Investment in its subsidiary viz. Sanathan Polycot Private Limited, for repayment and/ or prepayment, in full or part, of certain borrowings availed by its subsidiary viz. Sanathan Polycot Private Limited; and
• General corporate purposes.

Offer For Sale

The company will not receive any proceeds from the Offer for Sale, and the proceeds received from the Offer for Sale will not form part of the Net Proceeds. Each Selling Shareholder will be entitled to proceeds from the Offer for Sale to the extent of their respective portion of the Offered Shares after deducting their respective proportion of Offer-related expenses and relevant taxes.

About Sanathan Textiles Limited

Incorporated in 2005, Sanathan Textiles Limited is among the few Indian enterprises operating in the technical textile, cotton, and polyester industries. The company can manufacture a diversified product portfolio of more than 14,000 varieties of yarn products and more than 1,90,000 SKUs that are used in various forms and for varied end uses. As of June 30, 2024, the company had more than 2,800 active varieties of yarn products (i.e., yarn products manufactured by us during the period April 1, 2021, to March 31, 2024) and more than 30,000 stock-keeping units (SKUs).

The company has increased production throughout the years, and as of June 30, 2024, the three yarn verticals at its Silvassa site combined to have a total installed capacity of 2,23,750 MTPA. Although it produces goods for all vertical markets, polyester yarn remains its main product category. The company uses mono ethylene glycol (MEG) and pure terephthalic acid (PTA) to make polyester chips, which are then processed through various intermediate steps to give the yarn particular qualities.

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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.