Sanathan Textiles IPO

Sanathan Textiles Limited is a leading Indian company in the textile industry, excelling in polyester, cotton, and technical textiles. As of December 31, 2023, the company has produced over 2,800 active yarn varieties in the past nine months, with more than 30,000 stock-keeping units (SKUs). Its extensive portfolio includes over 14,000 yarn types and 190,000 SKUs, catering to diverse applications across the market. The company is particularly strong in value-added products, including dope dyed, superfine/micro, functional, industrial, and specialty yarns, developed through significant in-house research. These premium products now make up nearly half of its sales, underscoring strong demand for high-quality yarns.

Operating from its facility in Silvassa, Sanathan Textiles boasts an installed capacity of 223,750 MTPA across three yarn verticals, with polyester yarn products as its primary focus. The company manufactures polyester chips using purified terephthalic acid and monoethylene glycol, which are then processed into yarn. With the Indian textile and apparel industry projected to grow substantially, Sanathan Textiles is well-positioned to leverage this opportunity, backed by its robust network, broad customer base, and experienced management team.

Sanathan Textiles IPO Strengths

• Sanathan Textiles Limited produces over 14,000 yarn varieties and 192,640 SKUs across multiple textile sectors.
• 48.5% of its total sales in the 9 months ending December 31, 2023, come from premium yarns.
• The company operates a state-of-the-art facility in Silvassa with a capacity of 223,750 MTPA, certified under ISO standards.
• Sanathan Textiles has strong relationships with brands like Welspun India and Siyaram Silk Mills, serving 2,588 customers and 902 distributors in 7 countries.

Sanathan Textiles IPO Risks

• Sanathan Textiles lacks long-term agreements with most customers, risking order cancellations and demand fluctuations.
• The dependence on the Silvassa production facility exposes the company to risks from operational challenges or natural disasters.
• Without contractual exclusivity, customers can terminate relationships without notice, leading to sales variability and operational challenges.
• Weaknesses in internal financial controls, particularly in payment recording and revenue recognition, risk material misstatements and affect reliability.