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Sanathan Textiles IPO subscribed 0.84 times on Day 2. Check GMP and other details
Team Finance Saathi
20/Dec/2024
What's covered under the Article:
- Sanathan Textiles IPO opens December 19-23, 2024, with a 0.84x subscription.
- IPO GMP shows potential listing gains of 8.72%.
- How to check allotment status and the valuation of the company.
Sanathan Textiles IPO: Overview and Details
Sanathan Textiles, a leading polyester yarn manufacturer, is offering an IPO worth ₹550.00 Crores. The offer comprises a Fresh Issue of ₹400.00 Crores (124.61 lakh shares) and an Offer for Sale of ₹150.00 Crores (46.72 lakh shares). The subscription period for the Sanathan Textiles IPO is open from December 19 to December 23, 2024, with the allotment date expected on December 24, 2024. The shares will be listed on the BSE and NSE, with a tentative listing date of December 27, 2024.
IPO Pricing and Investment Details
The price band for the IPO is ₹305 to ₹321 per share, with a market capitalization of ₹2,709.37 Crores at the upper price band. The lot size is 46 shares, and retail investors are required to invest a minimum of ₹14,766, while HNIs must invest for a minimum of 644 shares (₹2,06,724).
The book-running lead managers for the issue are DAM Capital Advisors Limited and ICICI Securities Limited, while KFin Technologies Limited is the registrar.
Sanathan Textiles IPO Grey Market Premium (GMP)
The Grey Market Premium (GMP) for the Sanathan Textiles IPO indicates a potential listing gain of ₹28 (or 8.72%). While GMP provides some insight into demand, it is not a definitive indicator of future price discovery upon listing. Here’s the GMP trend for the IPO:
- 18 December 2024: ₹28 (8.72% increase in expected listing price)
Live Subscription Status
As of 12:30 PM on December 20, 2024, the Sanathan Textiles IPO has been subscribed 0.84 times on its second day of subscription. Keep track of the live subscription status on the BSE website for real-time updates.
Anchor Investors and Fundraising
Sanathan Textiles raised ₹164.99 Crores from Anchor Investors at ₹321 per share. The company has allocated 51,40,186 equity shares to the Anchor Investors, indicating significant institutional backing for the IPO.
IPO Allotment Status Guide
The allotment date for the Sanathan Textiles IPO is December 24, 2024, and investors can check their allotment status via the registrar’s website. Here’s how to check:
- Visit the IPO allotment status page on the registrar’s website.
- Select Sanathan Textiles Limited IPO from the dropdown list.
- Enter your application number, PAN, or DP Client ID.
- Submit the details to view your allotment status.
Objectives of Sanathan Textiles Limited IPO
Sanathan Textiles proposes to use the net proceeds for:
- ₹1,600 Million to repay certain borrowings.
- ₹1,400 Million to invest in its subsidiary Sanathan Polycot Private Limited for borrowings repayment.
- General corporate purposes.
Sanathan Textiles IPO Review
Sanathan Textiles is a prominent global supplier of Cotton Yarns, Polyester Yarns, and Yarns for Technical Textiles. The company operates across three yarn business verticals, offering diverse yarns for various applications in different sectors.
The company’s promoters—Paresh Vrajlal Dattani, Ajay Vallabhdas Dattani, Anilkumar Vrajdas Dattani, and Dinesh Vrajdas Dattani—bring a combined experience of 44-27 years in the textile industry.
Financial Overview
For the Fiscal year 2024, Sanathan Textiles reported revenues of ₹29,798.0 Million and Profit After Tax (PAT) of ₹1,338.48 Million. The pre-issue P/E ratio stands at 17.26x, and the post-issue P/E ratio is 20.24x, compared to the industry P/E ratio of 30x. These metrics indicate that the IPO is priced fairly.
With a GMP of ₹28 (8.72%), the company’s financials suggest that while the IPO is reasonably priced, it may not deliver significant listing gains. Therefore, we recommend investors to avoid the Sanathan Textiles IPO for listing gains.
Investment Opportunity
For those interested in the textile sector, the Sanathan Textiles IPO offers exposure to a well-established global supplier of various yarns. However, considering the moderate GMP and financial outlook, we recommend caution before investing for listing gains.