Sanathan Textiles files DRHP for ₹800 crore IPO with market regulator Sebi; see all the details in brief

In the coming week, a number of companies will be heading to the primary market to raise funds. JNK India will enter the markets with a share sale worth ₹650 crore, while Emmforce AutoTech’s IPO is worth it ₹54 crores. Vodafone Idea FPO is already in the ring, its largest ever follow-on offering, after beating the old record holder, Yes Bank. The pipeline itself has many others awaiting approval. Sanathan Textiles wants to make its debut. The company has filed its DRHP with the market regulator, the Stock Exchange Board of India (Sebi), for a ₹800 crore IPO. Please note that Sanathan Textiles had filed draft documents with Sebi in January 2022 to mobilize funds through an initial public offering for which it had received market regulator approval in May 2022. However, the company did not make a public offer at the time.

Before delving deeper, investors should look at how well the primary market is doing or expected to perform. Mahavir Lunawat, Managing Director of Pantomath Capital Advisors was quoted by LiveMint as saying that they are “extremely optimistic” about the IPOs planned for 2024. He gave the logic behind this statement. He said: “This optimism is fueled by a confluence of factors, including the surge in domestic capital, improved governance practices, the vibrant spirit of Indian entrepreneurship and favorable government policies supported by foreign direct investment.”

Now that you know the key things related to the functioning of the primary market, consider what yarn manufacturer Sanathan Textiles DRHP is all about for its initial public offering (IPO).

* Sanathan Textiles plans to raise money ₹800 crore through this share sale, according to the DRHP.

* The share sale of Sanathan Textiles consists of a new issue of shares for an aggregate amount of ₹500 crores

* The Sanathan Textiles Offer For Sale (OFS) component is worth maximum ₹300 crore (through promoters and promoter group entities), unveils its Draft Red Herring Prospectus (DRHP).

*Sanathan Textiles may even have a value of up to ₹100 crore pre-IPO placement of shares. If this actually happens, the size of the new song will be cut.

* Sanathan Textiles funds raised through this exercise will be utilized ₹210 crore for investments in Sanathan Polycot, a subsidiary, to meet long-term working capital needs. Another ₹175 crore will be used for debt repayment and other purposes.

* Sanathan Textiles’ lead managers in the issue are Dam Capital Advisors and ICICI Securities.

* The equity shares of Sanathan Textiles will be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

About Sanathan Textiles

* Sanathan Textiles has no fewer than 3 yarn divisions: cotton yarns, yarns and polyester yarns. However, they are all managed under a single corporate entity.

*The profit after tax of Sanathan Textiles was ₹152.74 crore on a consolidated turnover from operations of ₹3,329.21 crore during FY2023.