Sanathan Textiles, a leading manufacturer of polyester yarn and a global supplier of cotton and polyester yarns, is set to launch its IPO (Initial Public Offering), offering a fresh issue of 124.61 lakh shares worth ₹400 Crores and an Offer for Sale (OFS) of 46.72 lakh shares worth ₹150 Crores. The total issue size of the Sanathan Textiles IPO is ₹550 Crores. This article provides a comprehensive overview of the IPO, including key details, subscription updates, the grey market premium (GMP), allotment process, and financial performance analysis, helping investors make an informed decision.

IPO Details and Key Information

The Sanathan Textiles IPO will open for subscription from December 19, 2024 to December 23, 2024. The price band for the IPO has been set between ₹305 to ₹321 per equity share. At the upper end of the price band, the market capitalization of Sanathan Textiles will be approximately ₹2,709.37 Crores.

Lot Size and Minimum Investment

The lot size for the IPO is 46 shares. This means that retail investors need to invest a minimum of ₹14,766 to apply for the IPO. For High-Net-Worth Individuals (HNIs), the minimum investment requirement is 14 lots (644 shares), amounting to ₹2,06,724.

Sanathan Textiles IPO Subscription Status

As of December 20, 2024, the Sanathan Textiles IPO has been subscribed 1.43 times on its second day of the subscription period. This shows a positive response from investors, reflecting strong demand for the company’s shares.

Grey Market Premium (GMP) and Expected Listing Price

The Grey Market Premium (GMP) for the Sanathan Textiles IPO has been reported at ₹28, indicating an 8.72% premium over the issue price of ₹321. This suggests that the IPO might list at around ₹349, based on current grey market activity. However, as a reminder, grey market trading is unregulated, and it does not offer a reliable estimate of the listing price.

Sanathan Textiles IPO Allotment Process

The allotment date for the Sanathan Textiles IPO is set for December 24, 2024. Investors can check their allotment status on the Registrar’s website by following these simple steps:

1. Navigate to the IPO allotment status page.
2. Select Sanathan Textiles IPO from the list.
3. Enter your application number, PAN, or DP Client ID.
4. Submit the details to check your allotment status.

Objectives of the Sanathan Textiles IPO

The net proceeds from the Sanathan Textiles IPO will be utilized for the following purposes:

1. Repayment of borrowings: ₹1,600 million will be used to reduce the company’s debt.
2. Investment in subsidiary: ₹1,400 million will be used to repay borrowings by Sanathan Polycot Private Limited, a subsidiary.
3. General corporate purposes.

Sanathan Textiles Financial Performance

For the period ending June 30, 2024, Sanathan Textiles reported revenues from operations of ₹7,877.6 million, with an EBITDA of ₹830.71 million. The company’s Profit after Tax (PAT) for the same period was ₹500.73 million.

The company’s Pre-issue EPS is ₹18.6, and the Post-issue EPS is ₹15.86. The P/E ratio for the IPO is 17.26x (pre-issue) and 20.24x (post-issue), compared to the industry P/E ratio of 30x. This indicates that the IPO is fairly priced compared to industry standards.

IPO Review and Recommendation

Sanathan Textiles is a leading player in the textile industry, with diverse yarn verticals that cater to various sectors. The company’s financial growth, combined with a strong market share, makes it an attractive prospect for investors. However, given the GMP of ₹28 (which shows limited listing gains of 8.72%), we recommend avoiding the IPO for those seeking short-term gains.

Investors interested in the textile sector may consider this IPO for its long-term potential, but the listing gains may be moderate. Given the company's stable financials and reasonable valuation, it could still present a solid investment opportunity for long-term investors.

The Upcoming IPOs in this week and coming weeks are Solar91 Cleantech, Unimech Aerospace, Anya Polytech, Rosmerta Digital, Indo Farm, and Avanse Financial. The Current active IPO is Ventive Hospitality, Senores Pharmaceuticals, Carraro India, Transrail Lighting, Mamata Machinery, DAM Capital, Sanathan Textiles, Concord Enviro and Newmalayan Steel. For more details on upcoming IPOs, you can visit our page at  and stay updated with the latest news on IPO updates on . Join our  for regular Stock Market Trading and Investment Calls by  - SEBI Registered Research Analyst &  for Regular Share Market, News & IPO Updates. Start your Stock Market Journey and Apply in IPO by opening a Free Demat Account in .Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance SaathiTop News Headlines - Share Market News, Latest IPO News, Business News, Economy News - Finance SaathiTrading with CA Abhay Telegram ChannelCA Abhay VarnFinance Saathi Telegram ChannelChoice Broking FinX