Sanathan Textiles IPO: Issue dates, price, and lot size

Sanathan Textiles Limited, a polyester yarn manufacturer and cotton yarn supplier, is launching its ₹550 crore initial public offering (IPO) from December 19 to December 23, 2024. The offering includes a fresh issue of ₹400 crores (1.25 crore shares) and an offer-for-sale of ₹150 crores (0.47 crore shares). With a price band of ₹305 to ₹321 per share and a lot size of 46 shares, retail investors can participate with a minimum investment of ₹14,766.  

The share allotment is expected on December 24, followed by the company’s listing on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on December 27, 2024. This IPO presents a strategic opportunity for share market investment, offering access to a strong player in the textile sector with established market presence and significant growth potential.

Sanathan Textiles IPO Details

Sanathan Textiles Limited IPO is a fundraise worth ₹550 crores comprising fresh issue of 1.25 crore shares and offer for sale of 0.47 crore shares. The IPO will be available for subscription from December 19, 2024, to December 23, 2024, providing an opportunity for investors looking to gain a stake in the textile sector.

Sanathan Textiles IPO Timeline

The Sanathan Textiles Limited IPO opens for subscription on December 19, 2024, and closes on December 23, 2024, with allotment slated for December 24, 2024.

Sanathan Textiles IPO Review

Sanathan Textiles Limited, incorporated in 2005, is a prominent manufacturer of polyester and cotton yarn, offering products across three key verticals: polyester yarn, cotton yarn, and specialized technical yarns. The company's technical textile products cater to a variety of industries, including automotive, healthcare, construction, sports, outdoor activities, and protective clothing. As of September 30, 2024, the company boasts an extensive product range with over 3,200 active yarn varieties and 45,000 SKUs, while also possessing the capability to manufacture a highly diversified portfolio of over 14,000 yarn types and 190,000 SKUs for numerous end-use applications.  

With a strong global presence, Sanathan Textiles exported its products to 14 countries as of June 30, 2024, expanding from 27 and 29 countries in prior fiscal years. The company operates through a network of over 925 distributors across India, Argentina, Singapore, Germany, Greece, Canada, and Israel, supported by its manufacturing unit in Silvassa. Its client base includes major multinational and regional players like Welspun India Limited, Banswara Syntex Limited, Techno Sportswear, and Khosla Profil, reflecting its strong industry standing and ability to serve diverse customer needs across markets.

The company intends to utilize the net proceeds for three key purposes: repayment or prepayment, either fully or partially, of certain borrowings availed by the company; investment in its subsidiary, Sanathan Polycot Private Limited, to repay or prepay its borrowings; and for general corporate purposes. This allocation aims to strengthen the company’s financial position and support its operational growth.

Sanathan Textiles IPO Financials

The Sanathan Textiles Limited IPO showcases a healthy market capitalization of ₹2,709.37 crores as on March 31, 2024. Key performance indicators reflect the company's financial health, with a Return on Equity (RoE) of 11.09% and Return on Capital Employed (RoCE).

The Return on Net Worth (RoNW) stands at 10.42%, while the Price-to-Book Value (P/BV) is seen at 1.81. On an annual basis, the company's Profit After Tax (PAT) fell 12% while the revenue reduced by 11% in the financial year ending on March 31, 2024. A comparison of earnings per share (EPS) reveals a pre-IPO EPS of ₹18.60 while it will be ₹23.73 post-IPO.

Amount in ₹ crores

Sanathan Textiles IPO strengths

Sanathan Textiles Limited stands out with its diversified presence across polyester, cotton, and technical textile segments, enabling it to cater to multiple industries and reduce dependence on any single product category. Operating from its advanced, integrated manufacturing facility in Silvassa, equipped with state-of-the-art machinery, the company ensures cost efficiency, quality control, and scalability. Its focus on process innovation and premium yarn products has allowed it to expand its portfolio, offering over 14,000 varieties and 192,640 SKUs, catering to evolving market demands. Long-standing relationships with leading consumer brands like Welspun India and Siyaram Silk Mills, along with an extensive network of 902 distributors across seven countries, ensure consistent revenue streams and a strong market presence.  

The company’s strategic product mix, combined with a focus on value addition, premium yarn sales, and energy-efficient manufacturing practices, highlights its innovation-driven approach. Its robust financial performance and low customer concentration further strengthen its business model. Sanathan Textiles’ experienced management team with proven industry expertise has played a key role in driving operational efficiency and fostering steady growth, positioning the company as a reliable player in India’s competitive textile market.  

Sanathan Textiles IPO weaknesses

Sanathan Textiles faces revenue concentration risks due to significant reliance on a few key clients and its primary manufacturing facility in Silvassa. Any operational disruption at this plant, such as natural disasters or equipment failure, could severely impact its production and financial performance. The absence of long-term agreements with most customers exposes the company to demand variability, order cancellations, and heightened competition, which could disrupt revenue predictability. Additionally, uncertainties in raw material pricing and global demand-supply dynamics make the textile sector vulnerable to market volatility.  

The company has faced internal financial control issues in the past, particularly regarding payment recording and revenue recognition, which could impact financial accuracy and investor confidence. Sanathan Textiles also operates in a competitive global market, where international players may put pressure on margins. As a first-time public issuer, its IPO introduces risks such as liquidity concerns, regulatory compliance challenges, and investor uncertainty regarding sustained stock performance post-listing. These risks highlight the need for careful monitoring of operational, market, and investment factors to ensure long-term stability.  

Should you invest in the Sanathan Textiles IPO?

The Sanathan Textiles Limited IPO presents an enticing opportunity for investors to gain exposure to the textile sector as the company enters the public market. While the potential for strong returns is appealing, a prudent approach involves carefully analyzing the company’s financial health, market position, and growth prospects. Investors should thoroughly evaluate whether the offering aligns with their financial goals and risk tolerance, turning this promising opportunity into a well-informed and strategic investment decision.

FAQs

What is the Sanathan Textiles IPO?

The Sanathan Textiles Limited IPO is a main-board offering consisting of a fresh issue of 1.25 equity shares and an offer for sale of 0.47 crore shares with a face value of ₹10, aiming to raise a total of ₹550 crores. The share price is set between ₹305 and ₹321, with a minimum order quantity of 46 shares. This IPO will be open for subscription from December 19, 2024, to December 23, 2024. Kfin Technologies Limited is the registrar while DAM Capital Advisors Limited and ICICI Securities Limited are the book-running lead managers.

When will the Sanathan Textiles IPO open?

The Sanathan Textiles Limited IPO will open for subscription on December 19, 2024, and will close on December 23, 2024.

When is the Sanathan Textiles IPO listing date?

The tentative listing date for the Sanathan Textiles Limited IPO is Friday, December 27, 2024.