The IPO with a face value of Rs 10 comprises of fresh issue of equity shares aggregating up to Rs 500 crore and an offer for sale of up to Rs 300 crore by Promoters and Promoter Group
FinTech BizNews Service
Mumbai, August 21, 2024: Mumbai-based Sanathan Textiles, one of the few companies in India having a presence across the polyester, cotton, and technical textile sectors has refiled its draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) to raise Rs 800 crore through its Initial Public Offering (IPO).
The IPO with a face value of Rs 10 comprises of fresh issue of equity shares aggregating up to Rs 500 crore and an offer for sale of up to Rs 300 crore by Promoters and Promoter Group.
The offer for sale consists of the sale of equity shares of up to Rs 61.87 crore by Paresh Vrajlal Dattani, Rs 69.35 crore by Ajay Vallabhdas Dattani, Rs 71.12 crore by Anilkumar Vrajdas Dattani, Rs 74.37 crore by Dinesh Vrajdas Dattani, Rs 50 Lakh by Vajubhai Investments Private Limited, Rs 50 Lakh by Vallabhdas Dattani HUF, Rs 4.5 crore by Sonali Ajaykumar Dattani, Rs 50 Lakh by Dattani Dineshkumar Vrajdas HUF, Rs 7 crore by Beena Paresh Dattani, Rs 3.5 crore by Anilkumar Vrajdas Dattani HUF, Rs 6 crore by Paresh Kumar V Dattani HUF, Rs 25 Lakh by Jayshree Anilkumar Dattani, Rs 2.5 Lakh by Ajay Kumar V Dattani HUF, and Rs 50 Lakh by Vallabhdas Dattani.
Additionally, the company, in consultation with the lead bankers to the issue may consider a pre-IPO placement of equity shares aggregating up to Rs 100 crore.
Proceeds from the fresh issue of shares will be used to the extent of Rs 160 crore for repayment or pre-payment, in full or in part, of certain of its outstanding borrowings availed by the Company, Rs 215 crore for investment in its subsidiary viz. Sanathan Polycot Private Limited for funding its long-term working capital requirements besides general corporate purposes.
Sanathan Textiles operates three distinct yarn business divisions: Polyester yarns, cotton yarns, and yarns for technical textiles and industrial applications. These divisions are currently managed under a single corporate entity.
The company specializes in value-added yarn products, including dope-dyed, superfine/micro, functional, industrial, and technical yarns, as well as cationic dyeable and specialty yarns. These products result from extensive in-house research efforts. For fiscal ended March 31, 2024, value added products sold as a % of Total products sold stood at 51.9%. Additionally, in FY22 it has also started its sustainable textile initiative under the brand Sanathan Rivero where it recycles waste plastic bottles and converts them into yarns for fabrics.
The Products are manufactured at the Silvassa facility, which has grown its capacity significantly and as of June 30, 2024, the facility had a total installed capacity of 223750 metric tonnes per annum (MTPA) across the three yarn divisions. Recently it has acquired 80 acres of land in Wazirabad, Punjab where it is at an advanced stage to commission a greenfield facility that will manufacture Polyester yarn products and will increase its capacity by 550 tonnes per day to 1500 tonnes per day.
As of June 30, 2024, Sanathan Textiles had developed over 2,800 active varieties of yarn products and maintained more than 30,000 stock-keeping units (SKUs). The company's manufacturing capabilities encompass a diversified product range of over 14,000 yarn varieties and more than 190,000 SKUs, serving various end uses.
Over the years, the Mumbai-based company has established long-standing relationships with consumer brands such as Welspun India Limited, Valson Industries Limited, G.M. Fabrics Private Limited, and many more.
In terms of customer reach, the company served 1,571 customers during the fiscal ended March 31, 2024, and 1,684 customers during Fiscal 2023.
Sanathan Textiles has a strong international presence, exporting its products to 26 countries during the fiscal 2024. As on June 30, 2024, It has a network of over 925 distributors across seven countries, including India, Argentina, Singapore, and Portugal. The share of Domestic operations as a % of revenue from operations have increased from 86.95% in Fiscal 2022 to 95.61% in fiscal 2024.
The companies consolidated revenue from operations during the fiscal year 2024 stood at Rs 2,957.50 crore. Profit after tax was Rs 133.85 crore for the financial year 2024.
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.
