Sanathan Textiles IPO 2024: 10 Key Insights for Smart Investing
Sanathan Textiles Limited, a leading player in the textile industry, is gearing up to launch its ₹550 crore Initial Public Offering (IPO) from December 19 to December 23, 2024. Specializing in polyester, cotton, and technical yarns, Sanathan Textiles offers a unique opportunity for investors to tap into the robust growth of the textile sector.
Here are 10 key things you should know before investing in the Sanathan Textiles Limited IPO:
What makes Sanathan Textiles a good investment opportunity?
Sanathan Textiles Limited operates across three key segments: polyester yarn, cotton yarn, and technical yarns used in industries like healthcare, automotive, sports, and protective clothing.
- Global Reach: The company exports to over 14–29 countries and has a vast portfolio with more than 3,200 active yarn varieties and 45,000 SKUs as of September 2024.
- Trusted Clients: Its clientele includes prominent names like Welspun India and Valson Industries.
- Strategic Advantage: A fully integrated manufacturing plant at Silvassa, equipped with state-of-the-art machinery, ensures cost-efficiency and high-quality production.
What are the IPO dates, price band, and issue size?
Here are the key details of the Sanathan Textiles IPO:
- IPO Dates: December 19th – 23rd, 2024
- Listing Date: December 27th, 2024
- Price Band: ₹305–₹321 per share
- Total Issue Size: ₹550 Cr
- Face Value: ₹10 per share
- Lot Size: 46 shares
- Listing Exchange: BSE, NSE
- Promoters: Nimbus Trust, D&G Family Trust, A&J Family Trust, P&B Family Trust, and prominent individuals like Paresh Vrajlal Dattani and Ajay Vallabhdas Dattani.
What is the minimum investment for the IPO?
The minimum investment required for the Sanathan Textiles IPO is ₹14,030, based on the lot size of 46 shares at the lower price band of ₹305 per share. To increase allotment chances, applying at the upper price band of ₹321 per share will require ₹14,766.
What does the company do?
Founded in 2005, Sanathan Textiles Limited is a renowned manufacturer of polyester, cotton, and technical yarns.
- Product Portfolio: Offers an expansive range of yarn types, including those used in high-performance applications like automotive and protective clothing.
- Manufacturing Excellence: Operates a fully integrated facility in Silvassa, ensuring cost efficiency and scalability.
- Global Presence: With 925 distributors across seven nations, the company has a strong foothold in the international market.
What is the objective of the IPO?
The funds raised through the IPO will be utilized for:
- Repayment and/or pre-payment of borrowings by the company and its subsidiary, Sanathan Polycot Private Limited.
- General corporate purposes.
How much is reserved for retail and other investors?
The IPO allocation breakdown is as follows:
- Qualified Institutional Buyers (QIBs): Up to 50%
- Non-Institutional Investors (NIIs): At least 15%
- Retail Investors: At least 35%
What are the key strengths and risks?
Strengths:
- Presence across polyester, cotton, and technical textiles.
- Strong R&D focus on product and process innovation.
- Long-term relationships with leading consumer brands.
- Fully integrated plant at a strategic location for efficient production.
- Established supplier network for competitive raw material sourcing.
Risks:
- Inability to accurately estimate demand may lead to inventory challenges.
- Dependence on a few key suppliers for raw materials.
- Lack of long-term raw material supply agreements.
- Growth plans may face execution challenges or mismatched demand for increased capacities.
What is the financial performance of Sanathan Textiles?
The company has delivered consistent financial performance (₹ Cr):
| Period Ended | 31 Mar 2024 | 31 Mar 2023 | 31 Mar 2022 |
| Assets (₹ Cr) | ₹2,203.68 | ₹1,906.67 | ₹1,796.47 |
| Revenue (₹ Cr) | ₹2,979.8 | ₹3,345.02 | ₹3,201.46 |
| Profit After Tax (₹ Cr) | ₹133.85 | ₹152.74 | ₹355.44 |
What is the allotment and listing timeline?
- Basis of Allotment: December 24th, 2024
- Refund Initiation: December 26th, 2024
- Shares Credited to Demat Accounts: December 26th, 2024
- Listing Date: December 27th, 2024
Should you invest in Sanathan Textiles Limited IPO?
Sanathan Textiles Limited stands out due to its diversified product offerings, integrated manufacturing setup, and strong global presence. However, investors should consider risks such as dependency on raw material suppliers and execution challenges in growth plans.
Evaluate your financial goals and risk tolerance before investing in this IPO.
