Sanathan Textiles IPO subscribed 45% on Day 1
The Initial Public Offering of Sanathan Textiles Limited was subscribed 45% on the first day of bidding.
The issue received bids of 56,77,274 shares against the offered 1,26,22,950 equity shares, at a price band of ₹305-321, according to the data available on the stock exchanges.
Retail Portion and Non-Institutional Investors Portion were subscribed 0.76 times and 0.32 times respectively, whereas Qualified Institutional Buyer Portion is still to see traction. The issue kicked off for subscription on Thursday, December 19, 2024, and will close on Monday, December 23, 2024.
A day before the opening of the issue, Sanathan Textiles Ltd raised Rs 165 crores from anchor investors. Foreign and Domestic Institutions who participated in the anchor included SBI Mutual Fund, Nippon India Mutual Fund, HDFC Mutual Fund, Kotak Mutual Fund, Bandhan Mutual Fund, SBI General Insurance Company, Societe Generale, PineBridge Global Funds, Edelweiss Trusteeship, Whiteoak Capital, and Ashoka India Equity Investment Trust.
Leading brokerage firms like SBI Securities, Marwadi Financial Services, Ventura Securities, and Mehta Equities, have given a “Subscribe” rating to the issue highlighting the company’s strong growth potential driven by a 2.6x capacity expansion over FY24-27 and debt repayment plans. Its integrated manufacturing model, diverse product portfolio spanning polyester, cotton, and technical textiles, and focus on process innovation position it well to capture rising global demand and benefit from shifting sourcing trends favoring Indian manufacturers.
At the upper price band of Rs 321, the IPO is attractively priced at a P/E of 20.2x on FY24 earnings, compared to peers like KPR Mill and Vardhman Textiles, which trade at higher multiples. With its Punjab facility expansion set to boost production to 1,500 tonnes per day by 2027
DAM Capital Advisors Limited, and ICICI Securities Limited are the book-running lead managers, and KFin Technologies Limited is the registrar of the issue. The equity shares are proposed to be listed on BSE and NSE.
Company Information
Sanathan Textiles is one of the few companies (amongst our peer group) in India with presence across the polyester, cotton, and technical textile (which find application in multiple end-use segments including automotive, healthcare, construction, sports and outdoor, and protective clothing) sectors and based on our operating income, we had a market share of 1.7% in the overall Indian textile yarn industry as of Fiscal 2024. (Source: CRISIL Report). Currently, all the three yarn verticals are housed under a single corporate entity. This has facilitated our diversification into new segments which in turn has helped us in serving a large number of customers across various sectors. As on September 30, 2024, we have more than 3,200 active varieties of yarn products (i.e. yarn products manufactured by us during the period April 1, 2021 to September 30, 2024) and more than 45,000 stock keeping units (SKUs), and capability to manufacture a diversified product portfolio of more than 14,000 varieties of yarn products and more than 190,000 SKUs that are used in various forms and for varied end uses.
The table below shows subscription data for all the categories of investors:
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