Sanathan Textiles is a polyester yarn manufacturer and a global supplier of Cotton Yarns, Polyester Yarns and Yarns for Technical Textiles. Having 3 yarn business verticals gives them the unique opportunity to offer a wide variety of yarns that are used by various sectors and industries, across applications and end-uses.

Sanathan Textiles, an Book Built Issue amounting to ₹550.00 Crores, consisting an Fresh Issue of 124.61 Lakh Shares worth ₹400.00 Crores and an Offer for Sale of 46.72 Lakh Shares totalling to ₹150.00 Crores. The subscription period for the Sanathan Textiles IPO opens on December 19, 2024, and closes on December 23, 2024. The allotment is expected to be finalized on or about Tuesday, December 24, 2024, and the shares will be listed on the BSE & NSE with a tentative listing date set on or about Friday, December 27, 2024.

The Share price band of Sanathan Textiles IPO is set at ₹305 to ₹321 per equity share. The Market Capitalisation of the Sanathan Textiles Limited at IPO price of ₹321 per equity share will be ₹2,709.37 Crores. The lot size of the IPO is 46 shares. Retail investors are required to invest a minimum of ₹14,766, while the minimum investment for High-Net-Worth Individuals (HNIs) is 14 lots (644 shares), amounting to ₹2,06,724.

DAM Capital Advisors Limited and ICICI Securities Limited are the book-running lead manager while KFin Technologies Limited is the registrar for the Issue. 

Sanathan Textiles Limited IPO GMP Today
The Grey Market Premium of Sanathan Textiles Limited IPO is expected to be ₹28 based on the financial performance of the company. No real trading is done on the basis of Grey Market Premium that's why no real discovery of price can be done before the listing of shares on the stock exchange. The Grey Market Premium totally depends upon the Demand and Supply of the shares of the company in unorganized manner which is not recommended. The Grey Market Premium is mentioned for educational and informational purposes only.

Sanathan Textiles Limited Day Wise IPO GMP Trend 

Date	IPO Price	Expected Listing Price	GMP	Last Updated
18 December 2024	₹ 321	₹ 349	₹ 28 (8.72%)	05:50 PM; 18 Dec 2024

Sanathan Textiles Limited IPO Live Subscription Status Today: Real-Time Update
As of 07:00 PM on 23 December 2024, the Sanathan Textiles IPO live subscription status shows that the IPO subscribed 35.12 times on its Final day of subscription period. Check the Sanathan Textiles IPO Live Subscription Status Today at BSE.

Sanathan Textiles IPO Anchor Investors Report
Sanathan Textiles has raised ₹164.99 Crores from Anchor Investors at a price of ₹321 per shares in consultation of the Book Running Lead Managers. The company allocated 51,40,186 equity shares to the Anchor Investors. Check Full List of Sanathan Textiles Anchor Investor List.

Note:- Equity Shares allotted to Anchor Investors (if any) are allotted from Qualified Institutional Buyers (QIBs) reservation portion.
Note:- The Number of shares offered shown IPO subscription section table is calculated at the lower end of the price band and Number of shares calculated in IPO details table section is calculated at upper end of the price band in case of Book Building Issue, so there can be difference. This is because we assume shares will be issued by the company at upper band as Anchor Investors also subscribe at upper band and shares will be issued at lower band only if in case of undersubscription of IPO.
Note:- Market Maker portion (if any) are not shown separately in subscription table and included in NIIs reservation portion

Sanathan Textiles Limited IPO Allotment Date - Step by Step Guide to Check Allotment Status Online
Sanathan Textiles IPO allotment date is 24 December, 2024, Tuesday. Sanathan Textiles IPO Allotment will be out on 24th December 2024 and will be live on Registrar Website from the allotment date. Check Sanathan Textiles IPO Allotment Status here. Here's how you can check the allotment status:
- Navigate to the IPO allotment status page.
- Select Sanathan Textiles Limited IPO from the dropdown list of IPOs.
- Enter your application number, PAN, or DP Client ID.
- Submit the details to check your allotment status.
By following either of these methods, investors can quickly determine their allotment status and proceed accordingly with their investments.

Objectives of Sanathan Textiles Limited IPO
Sanathan Textiles proposes to utilise the Net Proceeds towards the following objects: 
1. ₹1,600.00 Million is required for the Repayment and/ or pre-payment, in full or part, of certain borrowings availed by the Company;
2. ₹1,400.00 Million is required for the Investment in their subsidiary viz. Sanathan Polycot Private Limited, for repayment and/ or pre-payment, in full or part, of certain borrowings availed by their subsidiary viz. Sanathan Polycot Private Limited; and
3. General corporate purposes.

Refer to Sanathan Textiles Limited RHP for more details about the Company.

Check latest IPO Review & analysis, Live IPO GMP today, Live IPO Subscription Status Today, Share Price, Financial Information and other details before applying in the IPO.

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About Sanathan Textiles Limited

BUSINESS OVERVIEW

Sanathan Textiles is one of the few companies in India with a presence across polyester, cotton, and technical textiles, which are used in industries such as automotive, healthcare, construction, sports, and protective clothing. As of Fiscal 2024, the company held a 1.7% market share in the Indian textile yarn industry.

Operating under a single corporate entity, Sanathan Textiles has successfully diversified into new segments, serving a broad customer base. As of September 30, 2024, the company produces 3,200+ active yarn varieties and over 45,000 SKUs, with the capacity to manufacture over 14,000 yarn varieties and 190,000 SKUs. Their portfolio includes high-value-added products like dope-dyed, superfine, functional, and specialty yarns, developed through in-house research.

The company’s operations are divided into three verticals:

1. Polyester yarn products
2. Cotton yarn products
3. Technical textiles and industrial yarns

All products are manufactured at their Silvassa facility.

Sanathan Textiles has built strong, long-term relationships with major brands such as Welspun India, Valson Industries, Siyaram Silk Mills, D'Décor Home Fabrics, Page Industries, and more. In Fiscal 2024, they served 1,571 customers, a significant increase from 983 customers in June 2024. As of September 30, 2024, they had 1,394 employees. The Bankers of the Company are Bank of Baroda, Union Bank of India, Standard Chartered Bank and IndusInd Bank.

INDUSTRY ANALYSIS
Overview of Indian textile and apparel industry
Indian textile and apparel industry is projected to grow at a CAGR of 6.0-7.0% between fiscal 2024 and fiscal 2028, reaching a value of Rs. 12,400-12,500 billion in fiscal 2028. During this period, exports are expected to grow at a CAGR of 4.5-5.5% while domestic industry is expected to grow at slightly higher pace of 7.0-8.0%.

Between fiscals 2019 to fiscal 2024, the total Indian textile and apparel industry had grown at a CAGR of 4.5%. Within the total industry, the domestic Indian textile and apparel industry had grown at a higher pace of 5.8%, while exports have grown at a CAGR of 2.1%. The slower growth in exports is majorly due to decline in fiscal 2020 as a result of global slowdown which was further compounded by the Covid-19 pandemic leading to disruptions in supply chain and demand causing order cancellations. Also, high export tariffs levied on Indian exporters in countries like European Union (EU) when compared to zero import duty for other exporting countries such as Bangladesh have further dampened the export performance.

The future growth in Indian textile and apparel market will be led by various economic factors such as increase in discretionary income, rising urban population. Further, the demand is poised by increase in online retailing, shift from cotton to man-made fiber, robust growth of technical textiles segment. Additionally, global industry expanding outside of China would aid the Indian export markets in the growth trajectory.

As of CY2022 (fiscal 2023), India’s annual per capita consumption of clothing and footwear was at ~USD 79. Similarly, during CY2022, annual per capita consumption of clothing and footwear in developed economies of EU and US stood at ~USD 826 and ~USD 1,479 respectively, indicating a potential for growth in Indian textile and apparel industry.

As of fiscal 2024, domestic RMG segment contributed the highest revenue to the Indian textile and apparel market with 48%, followed by exports at 30%. Domestic technical textiles contributed 20% to the Indian textile and apparel market, while domestic home textiles completed the pie with remaining 2%. Within exports, RMG again was the largest contributor with 42% share followed by home textiles at 18%. Man-made yarn, fabrics and made ups came next with a share of 14%. Cotton yarn and technical textiles had a share of 11% and 7% respectively in Indian textile and apparel exports in fiscal 2024.

Though the textile industry in India is regionally diverse, South India dominates in terms of cotton textiles with majority of the cotton textile supply coming from this region. Tamil Nadu is the largest exporter of textiles from India (~Rs 592 billion in fiscal 2024). Hubs such as Coimbatore, Chennai, Tirupur play an important role in cotton and knitwear production. West India, particularly Maharashtra and Gujarat are known for manmade textile production.

Hubs such as Ahmedabad, Surat and Mumbai are well known for their synthetic fabrics. Northern region, especially Punjab and Haryana are known for readymade garments. Eastern region of India is not a significant contributor to the overall textile industry in India.

Overview of Indian textile yarn industry
The Indian textile yarn market, which was valued at Rs 1,606 billion in fiscal 2019, grew at a modest rate of ~3.0% CAGR between fiscals 2019 and 2023 to reach Rs 1,797 billion led by demand recovery after the pandemic.

In fiscal 2023, cotton yarn formed the major share of the Indian textile yarn market, accounting for 57% share in the market and was valued at Rs 1,030 billion. On a Y-o-Y basis, the cotton yarn market declined during fiscal 2024 by 4%, due to steep fall in yarn prices by ~25% compared to fiscal 2023. Cotton yarn market had registered a CAGR of 1.5% between fiscals 2019 and 2024 to reach Rs 960 billion in fiscal 2024 from Rs 895 billion in fiscal 2019.

The cotton yarn market is expected to grow at a 4.5-5.5% CAGR between fiscals 2024 and 2028 driven by recovery in global trade.

The market for manmade fibers (MMF), which includes polyester and viscose, account for ~41% of the total Indian textile yarn market in fiscal 2024. Polyester yarn market has grown at 1.0% CAGR till fiscal 2024 to reach Rs 561 billion from Rs 534 billion in fiscal 2019, while, viscose has grown at 8.1% CAGR till fiscal 2024 to reach Rs 147 billion from Rs 100 billion in fiscal 2019.

The Government of India had announced two schemes to increase the economies of scale, export potential and competitiveness in the textile sector: These are the Performance-Linked Incentives (PLI) scheme and Mega Investment Textile Parks (MITRA). If implemented well, both will boost MMF-based RMG exports, and drive demand for MMF and yarn. PLI scheme is an opportunity to generate Rs 1,800 billion in revenue in MMF-based textiles. As per Quarterly Review Reports (QRRs) as on September 30, 2023, the eligible investment made under the scheme was Rs. 21.2 billion of 30 selected applicants, out of which 12 selected applicants started commercial production, turnover achieved was Rs 5.2 billion including export of Rs 0.8 billion, and employment generated was 8,214.

Overview of polyester yarn industry in India
Over the years from fiscal 2019 to 2023, the total production of Polyester Staple Fiber (PSF) – in volume terms – had grown from ~1.3 million tonnes in fiscal 2019 to ~1.4 million tonnes in fiscal 2023. This growth is majorly driven by the rise in demand for polyester yarn during the period.

During fiscal 2023, the total production – in volume terms – of PSF saw a decline of 3.1% compared to fiscal 2022 majorly contributed by the fall in exports. For the year, though domestic demand of PSF (excluding imports) saw a Y-o-Y growth of 10.5% – the exports of PSF saw a steep decline of 40.7% on a Y-o-Y basis leading to the overall decline. The fall in exports is due to slowdown in international demand coupled with Covid-19 related disruptions in China.

In fiscal 2024, the domestic demand (excluding imports) of PSF saw a rise of 8.8% when compared to the previous fiscal due to low base effect. In contrast, the exports of PSF declined further for the same period, owing to slowdown in key importing regions such as European Union and United States.

As a result, from fiscal 2019 to 2024, the total production – in volume terms – of PSF had grown at a CAGR of 2.4% majorly driven by the domestic demand (excluding imports) of PSF during the period.

As of fiscal 2024, Turkey stands as the highest importer of PSF from India constituting a share of 32% followed by Brazil at 9%. Over the long-term, with the economic growth in these major importing nations, coupled with rise in consumption driven by growth in the blended and non-cotton segment of the industry, the overall production of PSF – in volume terms – is estimated to grow at a CAGR of 1.5 – 2.5% between fiscals 2024 and 2028.

BUSINESS STRENGTHS

1. Diversified Yarn Product Range : Sanathan Textiles operates across three verticals: polyester yarn, cotton yarn, and technical textiles. With more than 14,000 yarn varieties and over 190,000 SKUs, the company offers a wide range of products for various applications and end uses.

2. Product Innovation and Customization : The company focuses on process innovation to develop customized, value-added products tailored to specific customer needs. Their in-house innovation team creates products with unique properties, ensuring strong customer relationships and high-margin sales.

3. Strategic Manufacturing Location : Sanathan Textiles operates a fully integrated yarn manufacturing plant in Silvassa, a key location for polyester yarn production. The proximity to raw material suppliers like Reliance Industries offers logistical advantages.

4. Strong Customer Relationships and Low Concentration : The company has established long-term associations with leading brands such as Welspun India and Page Industries, ensuring diversified customer base and sustained revenue growth.

5. Efficient Procurement and Supply Chain : With a deep understanding of market demands, Sanathan Textiles leverages its strong supplier network to procure materials at competitive prices, leading to efficient operations and a healthy working capital cycle.

6. Healthy Financial Performance : The company’s operational excellence has driven consistent financial growth, positioning it for continued success in the market.

7. Experienced Leadership : Sanathan Textiles is led by a highly experienced management team, with over 160 years of cumulative experience in the textiles industry. Their promoters have played a pivotal role in expanding the company’s product portfolio and driving growth.

BUSINESS STRATEGIES

1. Manufacturing Capacity Expansion : Sanathan Textiles aims to capitalize on the steady growth of the global yarn industry, which is projected to expand at a CAGR of 2.5-3.5% by 2027. The Indian textile market, expected to grow at 6.0-7.0% CAGR until 2028, provides strong opportunities, fueled by factors like rising discretionary income, urbanization, and the shift to online retail. Additionally, expanding global markets outside of China will support India's textile exports. 

2. Product Value Addition and Innovation : Sanathan Textiles is focused on offering a broad range of products at competitive prices, while continuously developing new offerings based on evolving customer needs. The company prioritizes product diversification and process improvements, ensuring a better alignment with consumer preferences and boosting sales potential.

3. Adoption of Technology and Sustainability : The company invests in advanced testing and production equipment, ensuring international quality standards. By embracing digitization, energy-efficient practices, and sustainable processes, Sanathan Textiles aims to improve operational efficiency, reduce production costs, and enhance product traceability, strengthening its competitive edge in the market.

BUSINESS RISK FACTORS

1. Critical Distributor Relationships: As of June 30, 2024, Sanathan Textiles relies on over 925 distributors across 7 countries, with a significant presence in India. This extensive distributor network is vital for business growth and expansion.

2. Geographical Revenue Concentration Risk: A substantial portion (over 60%) of Sanathan Textiles' revenue comes from Gujarat, Maharashtra, and Punjab. This concentration exposes the company to risks from regional civil unrest, economic fluctuations, natural disasters, or political instability in these states.

3. Dependence on Silvassa Facility: The company's production facility in Silvassa is crucial to operations and faces risks such as equipment failure, raw material shortages, labor disputes, and unforeseen events like natural disasters or industrial accidents. Any disruptions here could impact financial performance and operations.

4. New Facility in Wazirabad, Punjab: Sanathan Textiles is in the final stages of commissioning a new manufacturing facility in Wazirabad, Punjab, expected to significantly boost production capacity from 550 to 1,500 tonnes per day. The facility is set to be operational in phases starting Fiscal 2025.

5. Raw Material Import Dependency: Sanathan Textiles imports a substantial portion of its raw materials. With imports accounting for nearly 40% of raw material consumption, fluctuations in foreign exchange or political instability can lead to higher costs, affecting margins and profitability.

Note : Sanathan Textiles faces risks from revenue concentration in key states, reliance on the Silvassa facility, challenges in commissioning a new Punjab unit, and dependence on imported raw materials, exposing it to operational disruptions and cost fluctuations.