Mumbai-based Sanathan Textiles, filed its draft red herring prospectus (DRHP) with the market regulator Sebi to raise funds through an Initial Public Offering (IPO). The issue size will be in the range of Rs 1,200-1,300 crore.
The yarn manufacturer plans to raise Rs 500 crore via fresh issue of equity shares and there will be an offer for sale of up to 11,400,000 equity shares by the promoters. Additionally, the company may consider a pre-IPO placement of equity shares aggregating up to Rs 100 crore.
Proceeds from the fresh issuance of shares will be used to the extent of Rs 325 crore to repay/prepay in full or part, of certain borrowings availed by the company, Rs 65 crore for funding working capital requirements besides general corporate purposes.
The company’s business is divided into three separate yarn business verticals, consisting of polyester yarn products; cotton yarn products; and yarns for technical textiles and industrial uses, manufactured at its Silvassa facility.
The company said its customers include Arvind, Trident, Welspun India, Page Industries, D’décor Home Fabrics, Creative Group, Ascent Yarns and Paragon.
Sanathan Textiles recorded a profit of Rs 185.63 crore on revenue of Rs 1,918.36 crore for FY21, which saw the impact of lockdown during April-June 2020, and clocked a profit of Rs 170.78 crore on revenue of Rs 1,438.88 crore for the six months ended September 2021. The company had a return on equity (RoE) of 29.42 per cent for FY21.