Sanathan Textiles Ltd, a leading yarn manufacturer, witnessed a robust response to its initial public offering (IPO), with the issue being oversubscribed 35.12 times on its final day of bidding, December 23. The IPO, which aimed to raise ₹550 crore, attracted strong investor interest across all categories, cementing the company's position as a prominent player in the textile industry.

Bidding Details and Oversubscription

As per NSE data, the IPO received bids for 44,32,74,446 shares, significantly exceeding the 1,26,22,950 shares on offer. The breakdown of subscription levels across investor categories is as follows:

• Qualified Institutional Buyers (QIBs): The QIB category garnered the highest interest, with a subscription rate of 75.62 times, highlighting strong confidence from institutional investors.

• Non-Institutional Investors (NIIs): The NII quota recorded a robust 42.21-times subscription, reflecting high demand from high-net-worth individuals and other non-retail investors.

• Retail Individual Investors (RIIs): The retail segment saw healthy participation, with an 8.93-times subscription, underscoring strong retail enthusiasm for the IPO.

Anchor Investor Participation

Ahead of the public issue, Sanathan Textiles raised ₹165 crore from anchor investors, further demonstrating strong market confidence. This pre-IPO allocation helped boost momentum for the share sale.

IPO Details

The IPO comprised two components:

1. Fresh Issue: Equity shares worth ₹400 crore.

2. Offer for Sale (OFS): Shares worth ₹150 crore were offered by promoters and promoter group entities.

The price band for the IPO was set at ₹305-₹321 per share, and the equity shares are set to be listed on the BSE and NSE.

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Utilization of Funds

Sanathan Textiles plans to allocate the proceeds from the fresh issue as follows:

• ₹160 crore for debt repayment or prepayment to strengthen its financial position.

• ₹140 crore investment into its wholly-owned subsidiary, Sanathan Polycot Pvt Ltd, to reduce its borrowings.

• Remaining funds will be used for general corporate purposes, ensuring operational flexibility and further growth.

Business Overview

Sanathan Textiles operates across three key yarn business divisions:

1. Polyester Yarns: Used in apparel and home textiles.

2. Cotton Yarns: Catering to a wide range of fabric requirements.

3. Technical Yarns: For industrial applications and technical textiles.

These diverse segments are managed under a single corporate umbrella, making Sanathan Textiles a unique player in the yarn manufacturing industry.

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IPO Lead Managers

The IPO was managed by Dam Capital Advisors and ICICI Securities, who served as the book-running lead managers.

Market Outlook

The remarkable subscription figures indicate high investor confidence in Sanathan Textiles' growth prospects, supported by its diversified product portfolio and strong industry presence. The company’s focus on reducing debt and expanding its technical yarn segment positions it well for long-term growth in both domestic and international markets.

With the IPO now concluded, all eyes are on the listing, which will take place on the BSE and NSE in the coming weeks. Investors are optimistic about the company’s ability to deliver value, driven by its strategic plans and robust demand in the textile sector.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always consult with a financial advisor before making investment decisions.