Sanathan Textiles sets price band of Rs 305-321 a share for its IPO

The net proceeds from the fresh issue of Rs 400 crore will be used to repay debt for both Sanathan Textiles and its subsidiary, Sanathan Polycot.

Sanathan Textiles Ltd has announced a price band of Rs 305-321 per share for its upcoming initial public offering (IPO), which will open on December 19 and close on December 23. Anchor investor bidding will commence on December 18. The basis of allotment will be finalized on December 24, with refunds initiated and equity shares credited to demat accounts by December 26. The stock is scheduled to list on the exchanges on December 27.

The IPO comprises a fresh issue of Rs 400 crore and an offer for sale (OFS) of up to Rs 150 crore by existing shareholders and promoters. On the upper price band of the issue, the total mcap of the firm stood at Rs 2710 crore.

The net proceeds from the fresh issue of Rs 400 crore will be used to repay debt for both Sanathan Textiles and its subsidiary, Sanathan Polycot. As of September 2024, the company’s total debt stood at Rs 2,721.59 crore, while Sanathan Polycot’s debt amounted to Rs 950 crore.

Sanathan Textiles is one of the few companies in India with a presence across polyester, cotton, and technical textile segments, catering to multiple end-use industries such as automotive, healthcare, construction, sports and outdoor, and protective clothing. Based on its operating income, the company held a 1.7% market share in the Indian textile yarn industry.

As of September 30, 2024, the company offers over 3,200 active yarn varieties and maintains more than 45,000 stock-keeping units (SKUs). It has the capability to manufacture a diversified product portfolio comprising over 14,000 yarn varieties and more than 190,000 SKUs for various applications.

With an installed production capacity of 2,23,750 MTPA at its Silvassa facility, Sanathan Textiles operates across three business verticals: polyester yarn, cotton yarn, and technical and industrial yarns. The polyester yarn segment is the largest contributor, accounting for 77% of revenue, followed by cotton yarn at 19%.

For FY24, Sanathan Textiles reported revenue of Rs 2,957.50 crore, compared to Rs 3,329.21 crore in the previous fiscal. Net profit for FY24 stood at Rs 133.85 crore, down from Rs 152.74 crore a year ago.