Sanathan Textiles Limited is coming up with an IPO consisting of a fresh issue of 1.25 crore shares worth INR 400 crores and an offer to sell 0.47 crore existing shares worth INR 150 crores. The company aims to repay borrowings, invest in subsidiary debt repayment, and fund corporate purposes. 

Sanathan Textiles IPO – Important Dates 

Read more about Sanathan Textiles Limited IPO GMP

Sanathan Textiles Limited IPO – Company Profile 

Sanathan Textiles Limited operates in polyester, cotton, and technical textiles, offering 3,200+ yarn varieties, 45,000+ SKUs, and 14,000+ diversified products. Its strong focus is on value-added, innovative, and customer-tailored yarn solutions. 

With a 223,750 MTPA facility in Silvassa, Sanathan Textiles Limited focuses on polyester yarn production. It leverages industry growth, rising urbanisation, e-commerce expansion, and global market shifts to drive its future trajectory. 

With a commitment to sustainability, Sanathan Textiles Limited maintains strong ties with leading brands, leverages rooftop solar projects at its Silvassa facility, and actively invests in renewable energy initiatives for greener operations. 

Sanathan Textiles Ltd IPO Fundamental Analysis 

Sanathan Textiles Limited’s financial analysis reveals a mixed performance. Revenue has increased, but declining profitability, EPS, RoNW, and liquidity highlight challenges despite asset growth, rising equity, and improved inventory turnover, indicating potential operational efficiency. 

• Revenue Trend: The revenue increased from ₹31,853.20 millions in March 2022 to ₹33,292.13 millions in March 2023. The revenue for the current year’s 3-month period ending June 2024 is INR 7,811.28 million. 
• Equity and Liabilities: Equities have shown a consistent increase over the periods, reflecting potential growth and expansion. However, the debt-equity ratio has increased, indicating rising reliance on debt financing. 
• Profitability: The profit after tax (PAT) has significantly decreased from ₹3,554.42 million in March 2022 to ₹500.73 million by June 2024. This decline in profitability could be a source of concern among investors. 
• Earnings per Share (EPS): The diluted EPS has reduced from ₹49.40 in March 2022 to ₹6.96 by June 2024, reflecting lower earnings per share for investors. 
• Return on Net Worth (RoNW): The RoNW has decreased from 36.03% to 3.72%, indicating a decrease in the company’s ability to generate returns on shareholder equity. 
• Financial Position: Total assets have increased, suggesting potential business growth. However, the current ratio has decreased, indicating weakening liquidity and potential challenges in meeting short-term obligations. 
• Inventory Turnover Ratio: There’s an increase in the Inventory Turnover Ratio, which might suggest faster sales or efficient inventory management. 

Check out the other upcoming IPOs this month:

Sanathan Textiles IPO Financial Analysis 

Sanathan Textiles Limited IPO Peer Comparison 

Sanathan Textiles Limited shows steady performance, K.P.R. Mill excels in profitability, Vardhman Textiles displays strong returns, Indo Count Industries maintains growth, Filatex India shows consistent results, and Garware Technical Fibres leads in high profitability. 

Sanathan Textiles Ltd IPO Objective 

The main objective of Sanathan Textiles Limited is to repay or prepay borrowings for the company and its subsidiary, Sanathan Polycot Private Limited, ensuring financial stability and reducing debt obligations. 

1. Repayment and/or prepayment repayment of certain borrowings, in whole or in part, availed by the company: The company intends to utilise INR 160 crore from the Net Proceeds for the repayment or prepayment repayment of certain borrowings, aiming to deleverage the company, reduce debt servicing costs, and support business growth. 

2. Investment in the subsidiary viz. Sanathan Polycot Private Limited, for repayment and/ or prepayment, in whole or part, of certain borrowings availed by their subsidiary, viz. Sanathan Polycot Private Limited: The company plans to utilise INR 140 crore from the Net Proceeds to subscribe to preference shares of Sanathan Polycot Private Limited, facilitating repayment and prepayment of certain borrowings, thereby reducing debt and improving financial flexibility. 

3. General corporate purposes: The company will deploy funds for general corporate purposes, including strengthening the existing ecosystem, business development, meeting corporate contingencies, paying lease liabilities, employee welfare, taxes, repairs, maintenance, and other operational expenses. 

Sanathan Textiles IPO Risks And Challenges 

Sanathan Textiles Limited’s risk includes reliance on third-party suppliers for key raw materials, demand forecasting errors, and potential delays in revising net proceeds deployment, which could adversely impact operations, profitability, and business performance. 

• The company relies on third-party suppliers for key raw materials like PTA, MEG, and cotton, and disruptions or price increases could potentially impact operations. Raw material costs, mainly cotton, significantly affect profitability and margins. 
• The company’s success depends on accurate demand forecasting. Inaccurate forecasts may lead to excess inventory or stock shortages, which may impact sales and capital requirements and potentially incur losses, affecting overall business performance. 

• The company may revise the deployment of net proceeds based on changing business conditions. Any variations require shareholder approval, and delays or rejections could impact operations, business performance, and financial condition. 

Sanathan Textiles Ltd IPO – Industry & Market Potential 

The global textile industry grew 3.8% in CY2021 and 3.9% in CY2022. It is projected to expand at a CAGR of 2.5-3.5%, reaching USD 1,780-1,830 billion by CY2027, driven by apparel demand and e-commerce growth. 

The Indian textile and apparel industry is projected to grow at 6.0-7.0% CAGR from FY2024 to FY2028, reaching Rs. 12,400-12,500 billion. Growth drivers include rising income, urbanisation, online retail, and global expansion. 

The Indian cotton yarn industry grew at a 3.6% CAGR from FY2019 to FY2023, with exports supporting growth. From FY2024 to FY2028, the industry is expected to grow at 5.5-6.5% CAGR, driven by RMG and textile demand. 

Sanathan Textiles Limited IPO – Type of Offer 

Sanathan Textiles Limited plans a fresh issue of 1.25 crore shares, seeking INR 400 crores to repay borrowings, invest in subsidiary debt repayment, and fund corporate purposes. Additionally, the company proposes an offer to sell 0.47 crore existing shares worth INR 150 crores. 

1. Fresh Issue: The company will issue 1.25 crore new shares to raise capital, aiming to collect INR 400 crores. The company intends to utilise the proceeds from the fresh issue to repay borrowings, invest in subsidiary debt repayment, and fund corporate purposes.
2. Offer for sale: Sanathan Textiles Limited is offering to sell 0.47 crore existing shares worth INR 150 crores. The following are the details of the existing shareholders who are also the promoters selling the shares:

Sanathan Textiles IPO Offer Size 

The offer size of Sanathan Textiles Limited is INR 550 crores, consisting of a fresh issue of 1.25 crore shares worth INR 400 crores and an offer to sell 0.47 crore existing shares worth INR 150 crores. The company aims to repay borrowings, invest in subsidiary debt repayment, and fund corporate purposes. 

Sanathan Textiles Limited IPO Allotment Structure 

Sanathan Textiles Limited’s allocation will be as follows: 50% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Individual Investors (RII) according to SEBI regulations. 

● Qualified Institutional Buyers (QIB): As per SEBI regulations, 50% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.

● Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.

● Retail Individual Investors (RII): The remaining 35% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs. 

How to apply for Sanathan Textiles IPO?

To apply for the Sanathan Textiles Limited IPO through Alice Blue, follow these steps:

Open a Demat and Trading Account: If you don’t have one already, you must open a Demat and trading account with Alice Blue.

1. Check for IPO Details: Once your account is active, you can check for the Sanathan Textiles Limited IPO details in the IPO section of the Alice Blue platform.
2. Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.
3. Submit the Application: Confirm all your details and submit your application.

 You can apply for the Sanathan Textiles Limited IPO at Alice Blue in just a few clicks!

Check Allotment Status: After the allotment process, you can check the allotment status to see if you have received any shares.

Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.

How do you check Sanathan Textiles IPO Allotment Status?

Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:

1. Log in to your Alice Blue Account: You can do this through the Alice Blue website or the trading app.
2. Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.
3. Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.
4. Select the Sanathan Textiles Limited IPO: If you have applied for multiple IPOs, there might be a dropdown menu or a list where you can select the IPO you are interested in. Select the Sanathan Textiles Limited IPO.
5. Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.

 If you face any issues, we request you to reach out to our customer support team at Alice Blue for detailed assistance. 

 Apart from Alice Blue, there are other ways to check the allotment status of the Sanathan Textiles Limited IPO:

● Registrar’s Website: Visit the website of KFin Technologies Limited, the registrar of the Sanathan Textiles Limited IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN, application, or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status. 

● BSE NSE: You can also check the allotment status on the official websites of the Bombay Stock Exchange (BSE) National Stock Exchange (NSE). You would need your application number and PAN to check the status. 

Please note that the allotment status will only be available after completing the allotment process, a few days after the IPO window closes.

Sanathan Textiles Ltd IPO Offer Registrar

The registrar for the Sanathan Textiles Limited IPO is KFin Technologies Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.

Contact information for the registrar: 

KFin Technologies Limited Selenium,

Tower-B, Plot No. 31 and 32 Financial

District Nanakramguda, Serilingampally

Hyderabad 500 032 Telangana, India

Tel: +91 40 6716 2222

E-mail: [email protected]

Website: www.kfintech.com 

Sanathan Textiles IPO – FAQs