Sanathan Textiles IPO subscribed 1.43 times as on Day 2. Check GMP, review and other details

The initial public offer (IPO) of Sanathan Textiles was subscribed 1.43 times on Friday, the second day of bidding. The Rs 550 crore issue, which is a mix of fresh equity sale of Rs 400 crore and an offer for sale (OFS) of 46.72 lakh shares, will be available for bidding till December 23.

Subscriptions from retail investors stood at 2.15 times, while the non institutions investors (NIIs) had subscribed the issue 1.53 times. The qualified institutional buyers (QIBs) quota was booked 9% at the end of the day.

The proceeds from the offer will be used for repayment of debt, investment in their subsidiary Sanathan Polycot and general corporate purposes.

Sanathan Textiles IPO: price band

The company has fixed a price band of Rs 305-321 per share, where investors can bid for 46 shares in one lot and in multiples thereafter.

Sanathan Textiles IPO GMP today

Sanathan Textiles’ unlisted shares were trading at Rs 381 per share on Friday, down from Rs 391 per share in the grey market, reflecting a grey market premium (GMP) of 18.7% against the upper end of the IPO price band of Rs 321.

Sanathan Textiles IPO: Review

Analysts advised investors to subscribe to the issue as the company due to its diverse product base and the growth of the global yarn industry.

At the upper band, the company is valuing at 20.2x its FY24 EPS. Following the IPO, the company's market capitalization stands at Rs 2,709 crore, with a market cap-to-sales ratio of 0.9 based on its FY24 earnings.

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"The global yarn industry and the demand for yarn products are expected to grow in the coming years, driven by the increasing demand for apparel from the fashion industry and the rapid expansion of e-commerce platforms. We believe that the issue is fairly priced and recommend Subscribe – Long Term rating to the IPO," said Anand Rathi.

Sanathan Textiles IPO: Opening date, allotment and listing date

Sanathan Textiles IPO opened up for public subscription on December 19 with the issue set to close on December 23. Meanwhile, the allotment for the IPO is expected to be finalised on December 24 and the listing of shares is scheduled on December 27, with the shares listing on both BSE and NSE platforms.

About Sanathan Textiles IPO

Sanathan Textiles is one of the few companies (amongst their peer group) in India with presence across the polyester, cotton and technical textile sectors. Based on their operating income, they had a market share of 1.7% in the overall Indian textile yarn industry as of FY24.

Currently, all the three yarn verticals are housed under a single corporate entity. This has facilitated their diversification into new segments which in turn has helped them in serving many customers across various sectors.

As on September 2024, they have more than 3,200 active varieties of yarn products and over 45,000 stock keeping units (SKUs), and capability to manufacture a diversified product portfolio of more than 14,000 varieties of yarn products and more than 190,000 SKUs that are used in various forms and for varied end uses.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)