Sanathan Textiles Revives Rs 800 Crore IPO Plan; Refiles DRHP

22 Apr 2024 , 09:31 AM

Sanathan Textiles, a prominent manufacturer of yarn products, has resubmitted preliminary documents to SEBI, India’s capital markets regulator, with the aim of raising ₹800 Crore through an initial public offering (IPO).

The IPO comprises a combination of fresh equity shares valued at ₹500 Crore and an offer-for-sale (OFS) of shares worth ₹300 Crore by the promoters.

Previously, the company had filed draft papers for an IPO in January 2022, which included a fresh issue of ₹500 Crore and an OFS of 1.14 Crore equity shares by promoters. Although the IPO, aimed at raising around ₹1,300 Crore, received regulatory approval in May 2022, it could not proceed further.

As outlined in the latest prospectus, the Mumbai-based company may also explore raising up to ₹100 Crore through a pre-IPO placement before finalizing the red herring prospectus with the Registrar of Companies.

Upon successful completion of the IPO, Sanathan Textiles plans to allocate ₹175 Crore from the net fresh issue proceeds towards debt repayment, while ₹210 Crore will be earmarked for the long-term working capital requirements of its subsidiary, Sanathan Polycot. The remainder of the fresh issue funds will be utilized for general corporate purposes.

“As of December 2023, our total sanctioned and outstanding indebtedness was ₹2,608.5 Crore and ₹706.84 Crore, respectively,” the company disclosed in its Draft Red Herring Prospectus (DRHP).

Sanathan Textiles boasts an extensive portfolio of over 2,800 active varieties of yarn products and more than 30,000 stock keeping units (SKUs). The company has segmented its business into three distinct yarn verticals: polyester yarn products, cotton yarn products, and yarns tailored for technical textiles and industrial applications. These products are manufactured at the Silvassa facility, which had a total installed capacity of 2,23,750 metric tons per annum (MTPA) across the three yarn verticals as of December 2023.

DAM Capital Advisors and ICICI Securities have been appointed as the book-running lead managers to the IPO.