publive-imageSanathan Textiles Resurrects Rs 800 Crore IPO Scheme: Expanding Horizons in the Textile Industry

Sanathan Textiles, a well-known producer of yarn goods, has again made the preliminary arrangement with the public equity manager Sebi in India, but this time the focus is to raise 800 Crore from the public market through an initial public offering (IPO). Here the IPO offers sales of ₹500 crores worth of fresh shares and promoter shares of ₹300 crores value through a share offer for sale (OFS).

Earlier, the company had filed draft documents for the IPO in January 2022, which included an additional ₹500 crore and OFS of 1.14 crore equity shares of the promoters issued through the IPO, which had aimed to raise around ₹1,300 crore, failed to go ahead in May of 2022.

The Mumbai-based company may also explore raising ₹100 crore through a pre-IPO placement before finalizing a red herring prospectus with the Registrar of Companies.

After the successful completion of the IPO, Sanathan Textiles plans to allocate ₹175 crore from net fresh berry imports to finance debt, while ₹210 crore will be allocated for long-term working capital needs of its subsidiary Sanathan Polikot. The balance of the new issue will be used for general corporate purposes.

"Our total approved and outstanding loans as of December 2023 stood at ₹2,608.5 crore and ₹706.84 crore, respectively," the company disclosed in its draft red herring prospectus (DRHP).

The company has 2800 product types of active yarn and over 30,000 SKUs. “We need someone knowledgeable, passionate, and committed to making a positive impact on the world. The company has divided its business into three distinct yarn verticals: polyester yarn products, cotton yarn -Products, and yarns personalized for technical, textile, and workplace use.

These products are manufactured at the Silvassa plant which had a total capacity of 2,23,750 metric tonnes per annum (MTPA), with a total of three yarn verticals from December 2023. There was an installed capacity. DAM Capital Advisors and ICICI Securities were selected as lead sponsors on the IPO.

Conclusion: Besides innovation, sustainability, and to a greater extent, revival of customers-oriented approach, the company is eligible for a new way of growth and sustenance alongside consolidating its position in the textile industry as a possible leader. The IPO relaunch for Rs 800 crore signifies a milestone in the great progression of the company towards success and sustainability.