Sanathan Textiles, a manufacturer of yarn products, has resubmitted its preliminary papers to the Securities and Exchange Board of India (SEBI) to raise Rs 800 crore through an initial public offering (IPO).
The IPO consists of a combination of fresh issuance of equity shares worth Rs 500 crore and an offer-for-sale (OFS) of shares worth Rs 300 crore by promoters.
Previously, the company had filed draft papers with SEBI in January 2022 for an IPO comprising a fresh issue of Rs 500 crore and an OFS of 1.14 crore equity shares by promoters. Although it received approval from the regulator in May 2022 to raise around Rs 1,300 crore, the IPO could not proceed further.
According to the latest prospectus, the Mumbai-based company may also consider raising funds up to Rs 100 crore through a pre-IPO placement before filing the red herring prospectus with the Registrar of Companies.
Sanathan Textiles plans to utilize Rs 175 crore from the net fresh issue proceeds to repay debts, Rs 210 crore for long-term working capital requirements of its subsidiary Sanathan Polycot, and the remaining fresh issue funds for general corporate purposes.
“As of December 2023, our total sanctioned and outstanding indebtedness was Rs 2,608.5 crore and Rs 706.84 crore, respectively,” stated the company in its DRHP.
With over 2,800 active varieties of yarn products and more than 30,000 stock keeping units (SKUs), Sanathan Textiles has segmented its business into three separate yarn business verticals: polyester yarn products, cotton yarn products, and yarns for technical textiles and industrial uses.
The company manufactures its products at the Silvassa facility, which had a total installed capacity of 2,23,750 MTPA across the three yarn verticals as of December 2023.
DAM Capital Advisors and ICICI Securities will serve as the book-running lead managers to the issue.
