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

Here is what investors should know about Sanathan Textiles DRHP filed with Sebi for a ₹800 crore IPO.

A number of companies are taking to the primary market for fund gathering purposes in the next week. JNK India is set to enter the markets with a share sale valued at ₹650 crore, while Emmforce AutoTech IPO is worth ₹54 crore. Already in the ring is Vodafone Idea FPO, which is the largest such follow-on offer ever, having beaten the old record holder, which was Yes Bank. The pipeline itself has many others, which are awaiting approvals. Looking to make its debut is Sanathan Textiles. The company has filed its DRHP with the market regulator, the Stock Exchange Board of India (Sebi), for a ₹800 crore IPO. Do note that Sanathan Textiles had filed draft documents with Sebi in January, 2022 to mobilise funds through an IPO for which it had received the market regulator’s approval in May 2022. However, the company did not float the public offer then.

Sanathan Textiles DRHP has been filed with Sebi for a ₹800 crore IPO. (Image source: Pexels)

Before going any deeper, investors should take a look at how well the primary market is doing or is expected to fare. Mahavir Lunawat, Managing Director, Pantomath Capital Advisors was quoted by LiveMint as saying that they are “exceedingly optimistic” about the IPOs scheduled for 2024. He provided the logic behind this statement. He said, “This optimism is fueled by a confluence of factors, including the surge in domestic capital, enhanced governance practices, the vibrant spirit of Indian entrepreneurship, and favorable government policies bolstered by FDI support.”

Now that you know the most important things that go into the workings of the primary market, check what yarn manufacturer Sanathan Textiles DRHP for its initial public offering (IPO) is all about.

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

* Sanathan Textiles share sale is made up of a fresh issue of equity shares aggregating up to ₹500 crore

* Sanathan Textiles Offer For Sale (OFS) component is worth up to ₹300 crore (via promoters and promoter group entities), reveals its Draft Red Herring Prospectus (DRHP).

* Sanathan Textiles may even have an up to ₹100 crore pre-IPO placement of equity shares. The size of the fresh issue will be cut if this actually comes to pass.

* Sanathan Textiles funds gathered through this exercise will use ₹210 crore for investment in Sanathan Polycot, which is a subsidiary, to meet its long-term working capital needs. Another ₹175 crore will be used for repayment of debt and other purposes.

* Sanathan Textiles’ book-running lead managers to the issue are Dam Capital Advisors and ICICI Securities.

* Sanathan Textiles equity shares are set to be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

About Sanathan Textiles

* Sanathan Textiles has as many as 3 yarn business divisions - cotton yarns, yarns and polyester yarns. However, all of them are managed under a single corporate entity.

* Sanathan Textiles' profit after tax stood at ₹152.74 crore on a consolidated revenue from operations of ₹3,329.21 crore during the fiscal year 2023.