Sanathan Textiles IPO: Date, GMP, Price, & Overview

Sanathan Textiles IPO - Complete Overview 

Sanathan Textiles IPO a Mainboard IPO is a book-built issue of Rs.550 Cr (1,71,33,958 Shares) by Sanathan Textiles Limited that was founded in 2005 and marketed across the globe as Cotton Yarn. The business of Sanathan is distributed across three separate business verticals of yarns: (a) Polyester yarn products; (b) Cotton yarn products; and (c) Yarns for technical textiles and industrial uses.

These technical fabrics find usages mentioned above in diverse fields such as automotive, health care, construction, sports and outdoor activities, and protective clothing.

As of September 30, 2024, there are more than 3,200 active varieties of yarn products sold by the company (i.e., yarn products manufactured by us from April 1, 2021, to September 30, 2024) and over 45,000 stock-keeping units (SKUs). It possesses a wide variety of product lines, with the ability to manufacture yarn products exceeding 14,000 different types as well as more than 190,000 SKUs which are used for innumerable practical and end applications.

By June 2024, the company exported to 14, 27, and 29 countries by the end of FY24 and FY23, respectively, as of June 30, 2024.

As of June 30, 2024, it had more than 925 distributors in 7 countries, including India, Argentina, Singapore, Germany, Greece, Canada, and Israel.

The manufacturing unit of the company is located in Silvassa. The clientele of the company includes various multinational, regional, and local companies such as Welspun India Ltd., Valson Industries Ltd., G.M. Fabrics Pvt. Ltd., Premco Global Limited, Creative Garments Textile Mills Pvt. Ltd., Banswara Syntex Ltd, AYM Syntex Ltd, Techno Sportswear Pvt. Ltd, Haren Textiles Pvt. Ltd., Khosla Profil Pvt. Ltd., Tulip Elastics Pvt. Ltd., and others.

This new IPO is to be launched on 19 December 2024, and the initial public offering of this upcoming IPO will end on 23 December 2024.

Detailed video:

Sanathan Textiles IPO Details

The Rs.550 crore Sanathan IPO comprises a combination of a fresh issue of Rs.400 Cr (1.25 Cr Shares) and an offer for sale (OFS) of Rs.150 Cr (0.47 Cr Shares). The IPO listing date is on December 27, 2024. Sanathan Textiles IPO price is Rs.305 to Rs.321.

If you want to apply for the IPO, Click Here to open a Demat Account.

Company Financial

The company’s revenue fell by -11% and PAT decreased by -12% between FYs ended 31 Mar 2024 - 31 Mar 2023.

(Amount in Crore)

 

Cash Flows

The cash flows for various activities are shown below:

(Amount in millions)

 

Business-wise Revenue Bifurcation

(Amount in millions)

 

Sales-wise Revenue Bifurcation

(Amount in millions)

 

State-wise Revenue Bifurcation

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(Source RHP)

The Objective of the Issue

• Repayment and/or partial prepayment of some of the company's borrowed funds.

• Investment in Sanathan Polycot Private Limited, our subsidiary, in order to repay and/or prepay, in full or in part, any of the loans that our subsidiary has taken out.

• General Corporate Purposes.

 

Peers of Sanathan Textiles Limited

 

Evaluation

The Sanathan Textiles Limited IPO price band is between Rs.305 to Rs.321 for each Share.

Evaluation of P/E Ratio

Considering the FY ended 31 Mar 2024 with an EPS of Rs.18.60 from the last year, the resulting P/E ratio is 17.25x.
Considering the weighted EPS of Rs.24.61 for the last three years, the P/E ratio is 13.04x.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 29.50x.

In simple words, the P/E ratio of this IPO (17.25x), compared with the industry’s average P/E of 29.50x, has an undervaluation (on a P/E ratio basis only). Hence the price of the Share seems fully priced for the investors when considered based on the average P/E ratio of the industry.

IPO's Strengths    

• Presence in most of the polyester, cotton, and technical textile segments in India's peer group of companies.

• Mainly engaged in creating new products through process innovation.

• The yarn manufacturing facility is well integrated at a strategic place, equipped by domestic players and globally renowned suppliers.

• A long history of association with major consumer brands having low customer concentration.

• High knowledge and understanding of optimal product assortment and a strong supplier network that enable procurement at predictable and competitive prices, leading to an overall efficient cycle.

IPO’s Weaknesses 

• Market Risk: This being the initial public offering of the company, there has not been any established market for shares or equity in the company. It causes uncertainty for active or sustained trading in the shares post-listing.

• Liquidity Risk: Investors face some degree of liquidity risk. There is neither a liquidation guarantee nor a successful one at various future price levels at which the shares might trade.

• Regulatory Risk: An IPO is subject to very strict compliance with SEBI regulations. Therefore, any change in regulatory policies can affect trading and investment results.

• Business Risk: The performance of the company will depend on operational, market, and financial uncertainties that hit investment values directly.

• Investment Risk: This carries with it all the equity investment risks and the corresponding high probability of losing up to the last penny invested. Investors should understand all risk factors associated with their investments.

 

Sanathan IPO GMP

Sanathan Textiles IPO GMP today has not started yet as of 16 December 2024.

Sanathan IPO Timetable (Tentative)

The IPO date is from 19 December to 23 December, with IPO allotment on 24 December, and refund initiation on 26 December. The IPO listing date is on 27 December 2024.

 

IPO Other Details 

With a face value of Rs.10 per Share, the IPO size is 1,71,33,958 Shares and it will be listed at BSE and NSE.

Sanathan Textiles IPO Lot Size

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (46 Shares) amounting to Rs.14,766 and 13 Lots (598 Shares) amounting to Rs.1,91,958 respectively, while for HNI investors, the minimum Lot is 14 (644 Shares) amounting to Rs.2,06,724.

IPO Reservation

Promoters and Management of Sanathan Textiles Ltd. 

• Nimbus Trust

• D&G Family Trust

• A&J Family Trust

• P&B Family Trust

• Paresh Vrajlal Dattani

• Ajay Vallabhdas Dattani

• Anilkumar Vrajdas Dattani

• Dinesh Vrajdas Dattani.
  
  

IPO Lead Managers

• Dam Capital Advisors Ltd. (Formerly IDFC Securities Ltd.)

• ICICI Securities Limited.
  
  

Dividend Policy

The company has not declared dividends in the last three FYs.

Conclusion

The Sanathan Textiles IPO presents an option for investment in one very diverse company in well-established textiles along with a global presence. Nevertheless, investors should carefully consider risks such as market, liquidity, and regulatory problems. The most recent financial performance of the company depicts a decline, necessitating thorough analysis.

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here  to Download the DRHP.

DISCLAIMER: This is NOT any buy or sell recommendation. No investment or trading advice is given. The content is purely for educational and information purposes only. Always consult your eligible financial advisor for investment-related decisions. 

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