Sanathan Textiles IPO To Open For Subscription On December 19

Sanathan Textiles Ltd is a leading textile manufacturer in India, primarily focused on yarn production. The company creates a wide variety of yarns, including polyester, cotton, and blended options, which find applications in various sectors such as apparel, home textiles, and industrial fabrics.

IPO Details

The yarn manufacturer has submitted a red herring prospectus to the Registrar of Companies as it prepares to launch its ₹550-crore IPO for public subscription on December 19. This amount represents a reduction from the ₹800 crore initially stated in the preliminary documents.

Having filed draft papers for the third time in August 2024, the company received the necessary approval from the capital markets regulator, SEBI, on November 6.

Fresh Issuance 

According to the RHP submitted on December 14, Sanathan Textiles IPO includes a fresh issuance of equity shares valued at ₹400 crore, along with an offer-for-sale of shares amounting to ₹150 crore from the promoters (the Dattani family).

Sanathan operates a facility in Silvassa with an installed capacity of 2,23,750 MTPA, focusing on three segments of the yarn business: polyester yarn products, cotton yarn products, and yarns intended for technical textiles and industrial applications. The polyester yarn segment generates the largest share of revenue at 77%, while cotton yarn accounts for approximately 19%.

Opening and Closing Date

The anchor portion of the IPO will open for institutional investors on December 18, and the initial public offering will be available for public subscription until December 23.

Utilisation of Fund

The company, based in Mumbai, plans to use the net proceeds from the fresh issue, amounting to ₹300 crore, to pay down debts of both itself and its subsidiary, Sanathan Polycot. The remaining funds will be allocated for general corporate purposes, while the proceeds from the offer-for-sale will go directly to the promoters.

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