Sanathan Textiles files draft papers with Sebi; aims to raise up to Rs 1,300-cr via IPO

Yarn manufacturer Sanathan Textiles has filed preliminary documents with markets regulator Sebi to raise as much as Rs 1,300 crore through an initial public offering (IPO).

The initial share-sale comprises fresh issue of equity shares aggregating up to Rs 500 crore and an offer-for-sale of up to 1.14 crore equity shares by Dattani Family, according to the draft red herring prospectus (DRHP). The company might consider a pre-IPO placement of equity shares aggregating up to Rs 100 crore. According to market sources, the issue size will be in the range of Rs 1,200-1,300 crore.

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The proceeds from the fresh issuance of shares will be used to the extent of Rs 325 crore to repay debt, Rs 65 crore for funding working capital requirements besides general corporate purposes. Incorporated in 2005, the Mumbai-based Sanathan Textiles’ business is divided into three separate yarn business verticals, consisting of polyester yarn products; cotton yarn products; and yarns for technical textiles and industrial uses, manufactured at its Silvassa facility.

Over the years, the company has scaled up its yarn production with a total capacity from 4,500 MTPA in 2006 to 221,050 metric tonnes per annum (MTPA) in 2021. As on September 2021, they manufacture more than 12,900 varieties of yarn products with more than one lakh SKUs (stock keeping units).

Sanathan Textiles registered a profit of Rs 185.63 crore and revenue of Rs 1,918.36 crore for FY21. It clocked a profit of Rs 170.78 crore and revenue of Rs 1,438.88 crore for the six month ended September 2021. Edelweiss Financial Services and JM Financial are the book running lead managers to the issue.The shares of the company are proposed to be listed on the NSE and the BSE.