Sanathan Textiles Limited is preparing for its initial public offering (IPO) scheduled from December 19 to December 23, 2024, with a target to raise approximately ₹550 crores. The company specializes in manufacturing a diverse range of yarn products, including polyester and cotton yarns, catering to various sectors such as textiles and industrial applications. The IPO features a price band set between ₹305 and ₹321 per share, with a fresh issue of equity shares amounting to ₹400 crores and an offer for sale of ₹150 crores by promoters. Proceeds from the IPO will be used for debt repayment, investments in its subsidiary, and general corporate purposes.
₹80
₹321
₹422.30
Expert Opinions
Market sentiment for the Sanathan Textiles IPO is cautiously optimistic, reflecting a growing interest in the textile sector amid rising demand for yarn products. Company strengths include a diverse product portfolio with over 3,200 active yarn varieties and a significant market presence, particularly in polyester yarn, which accounts for 77% of its revenue. However, risks and challenges involve fluctuations in raw material prices and competition from established players that could impact profitability.
The valuation analysis sets the IPO price band between ₹305 and ₹321 per share, aiming to raise ₹550 crores, which appears reasonable given the company’s financial metrics. From a long-term investment perspective, Sanathan Textiles is well-positioned to benefit from the expanding textile market in India, making it an appealing option for investors seeking exposure to this essential sector.
Investor Considerations
Investors considering the Sanathan Textiles IPO should examine several important factors. Company performance and fundamentals are solid, with a diverse product portfolio that includes over 3,200 active yarn varieties and a revenue of ₹2,979.8 crores in FY24, although this reflects a decrease from ₹3,345.02 crores in FY23. The sector outlook is favorable, as demand for yarn products is expected to grow with the expansion of the textile industry in India.
The IPO valuation, set between ₹305 and ₹321 per share, aims to raise ₹550 crores through a combination of fresh equity and an offer for sale, which appears reasonable given the company’s market position. Growth prospects are promising, with plans for debt repayment and investments in its subsidiary, Sanathan Polycot Pvt Ltd. However, risk factors include raw material price volatility and competition from established players. A long-term investment horizon is recommended, as Sanathan Textiles is well-positioned to benefit from the expanding textile market.
| Date | GMP | Trend |
|---|---|---|
| 26 Dec 2024 11.50 | ₹80 | --- |
| 25 Dec 2024 11.20 | ₹80 | --- |
| 24 Dec 2024 11.00 | ₹80 | Up |
| 23 Dec 2024 11.52 | ₹40 | --- |
| 22 Dec 2024 12.05 | ₹40 | --- |
| 21 Dec 2024 12.38 | ₹40 | Down |
| 20 Dec 2024 10.49 | ₹70 | Up |
| 19 Dec 2024 18.06 | ₹60 | Up |
| 18 Dec 2024 11.57 | ₹25 | Up |
| 17 Dec 2024 12.09 | ₹00 | --- |
| 16 Dec 2024 17.54 | ₹00 | --- |
FAQs
The Grey Market Premium showed strong accuracy in predicting Sanathan Textiles’ listing performance. While the GMP of ₹80 predicted a premium of 24.92% over the issue price, the stock delivered a slightly higher gain of 31.56%. With a relatively small prediction error of 5.31%, the GMP effectively captured both the direction and approximate magnitude of the listing gains, proving to be a reliable indicator in this case.
Sanathan Textiles IPO Current GMP is ₹80.
Sanathan Textiles IPO Expected Returns is 24.92%.
Sanathan Textiles IPO estimated listing price is ₹401.