Is Sanathan Textiles the Next Big IPO #4?

Is Sanathan Textiles the Next Big IPO #4? Sanathan Textiles IPO Day 1: Key Updates on GMP, Subscription, Pricing, and Lot Size

The initial public offering (IPO) of Sanathan Textiles Ltd, a leading yarn manufacturer, opened for subscription on Thursday. Shares in the grey market are trading at ₹361, reflecting a Grey Market Premium (GMP) of 12.46% over the upper price band of ₹321, suggesting promising listing gains for investors.

Sanathan Textiles IPO: Overview

• Price Band: ₹305–₹321 per share
• Issue Size: ₹550 crore
  • Fresh Issue: ₹400 crore
  • Offer for Sale (OFS): ₹150 crore by promoters and related entities

Subscription Status

As of 12:04 PM on Day 1, the IPO has received bids for 18,83,148 shares against the total offer of 1,19,93,770 shares, resulting in a subscription rate of 0.16 times.

• Retail Category: Subscribed 0.29 times
• Non-Institutional Investors (NII): Subscribed 0.07 times

Key Dates

• Closing Date: December 23, 2024
• Allotment Finalisation: December 24, 2024
• Listing Date: December 27, 2024 (BSE & NSE)

Grey Market Premium (GMP)

The shares are trading at a premium of ₹40 (12.46%) over the upper price band of ₹321. This marks an increase from the 7.79% GMP recorded earlier in the week.

Lot Size and Investment Details

• Minimum Lot Size: 46 shares
• Retail Investment: ₹14,766 (minimum)
• Small NII Investment: 14 lots (644 shares) – ₹2,06,724
• Large NII Investment: 68 lots (3,128 shares) – ₹10,04,088

Anchor Investors

Sanathan Textiles raised ₹165 crore from anchor investors prior to the IPO. Key investors include SBI Mutual Fund, Nippon India Mutual Fund, HDFC Mutual Fund, Kotak Mutual Fund, Bandhan Mutual Fund, and others. A total of 51.4 lakh shares were allotted to 20 funds at ₹321 each.

Utilization of Proceeds

The company plans to allocate funds as follows:

• Debt Repayment: ₹160 crore
• Subsidiary Investment (Sanathan Polycot Pvt Ltd): ₹140 crore
• General Corporate Purposes: Remaining amount

Business Overview

Sanathan Textiles operates three distinct divisions: polyester yarns, cotton yarns, and technical/industrial yarns, all managed under a unified corporate structure.

IPO Reservation Details

• Qualified Institutional Buyers (QIBs): 50%
• Retail Investors: 35%
• Non-Institutional Investors (NIIs): 15%

Lead Managers

The issue is managed by Dam Capital Advisors and ICICI Securities.

The equity shares are set to be listed on both the BSE and NSE.

 

Is Sanathan Textiles the Next Big IPO #4? Sanathan Textiles IPO Day 1: GMP, Subscription Status, Review, and Investment Opinion

The IPO of Sanathan Textiles Ltd, a polyester yarn manufacturer and cotton yarn exporter, opened for subscription on December 19, 2024. The IPO, with a price band of ₹305 to ₹321 per share, aims to raise ₹550 crore through a combination of fresh issue and Offer for Sale (OFS). The issue will remain open until December 23, 2024, and the shares are set to be listed on the BSE and NSE on December 27, 2024.

Sanathan Textiles IPO Grey Market Premium (GMP)

As of today, Sanathan Textiles shares are trading at a premium of ₹30 in the grey market, reflecting a good sentiment from market observers.

Sanathan Textiles IPO Subscription Status

By 12:33 PM on Day 1, the IPO had been subscribed 0.18 times overall. The retail portion has been subscribed 0.33 times, while the Non-Institutional Investors (NII) category has seen a 0.07 times subscription.

IPO Key Details

• Price Band: ₹305 to ₹321 per share
• IPO Size: ₹550 crore (₹400 crore from fresh issue, ₹150 crore from OFS)
• Lot Size: 46 shares per lot
• Allotment Date: Likely December 24, 2024
• Registrar: KFin Technologies Ltd
• Lead Managers: DAM Capital Advisors and ICICI Securities
• Listing Date: December 27, 2024

Investment Opinion

• Avoid Recommendation: Akriti Mehrotra, Research Analyst at StoxBox, has given the IPO an “Avoid” rating. Despite a growth strategy involving production expansion and recycling, she cites the company’s financial and operational risks as reasons for her cautious stance.
• Subscribe Recommendation: Anshul Jain, Head of Research at Lakshmishree Investment and Securities, recommends subscribing to the IPO, stating that the offer price is lower than the fair value of the stock, which is around ₹355 to ₹360. He expects strong market interest and suggests investors apply for listing gains.

Final Thoughts

Investors should consider their risk appetite and the company’s financial stability before making a decision. While the IPO may offer good short-term gains based on market sentiment, long-term investment prospects should be evaluated based on the company’s financial performance and growth trajectory.

 

Sanathan Textiles IPO: Analysts Weigh in on Long-Term Prospects

Is Sanathan Textiles the Next Big IPO #4? Sanathan Textiles’ initial public offering (IPO) opened for subscription on December 19, 2024. The company aims to raise ₹550 crore through a combination of a fresh issue and an offer for sale. The fresh issue includes 1.25 crore shares, totaling ₹400 crore, while the offer for sale consists of 0.47 crore shares, amounting to ₹150 crore.

Ahead of the IPO, Sanathan Textiles secured ₹165 crore from anchor investors, including notable entities like SBI Magnum Children’s Benefit Fund, Nippon India SmallCap Fund, HDFC Manufacturing Fund, and Kotak Manufacture India Fund.

The funds raised will be used for repaying or prepaying borrowings, investing in its subsidiary Sanathan Polycot Pvt Ltd, and for general corporate purposes.

Sanathan Textiles IPO GMP

Is Sanathan Textiles the Next Big IPO #4? As per market observers, Sanathan Textiles shares are trading at a ₹40 premium in the grey market today, suggesting an expected listing price of ₹361 based on the upper price band of ₹321. This indicates a potential listing gain of 12.46%.

Sanathan Textiles IPO Price and Lot Size

• Price Band: ₹305 to ₹321 per share
• Lot Size: 46 shares
• Investment: Retail investors need to invest a minimum of ₹14,766 for 46 shares. Non-Institutional Investors (NII) need to apply for a minimum of 14 lots (644 shares) for ₹2,06,724, and for large NIIs, 68 lots (3,128 shares) amounting to ₹10,04,088.

IPO Timeline

• Subscription Period: December 19 to December 23, 2024
• Allotment Date: December 24, 2024
• Listing Date: December 27, 2024

IPO Financials

Is Sanathan Textiles the Next Big IPO #4? Sanathan Textiles’ revenue fell by 10.9% YoY to ₹2,979.8 crore in FY24, while its profit after tax (PAT) decreased by 12.3% to ₹133.85 crore. The company is projected to have a price-to-earnings multiple of 13.53 with an earnings per share (EPS) of ₹23.73 post-IPO.

Analysts’ Opinions

• Anand Rathi: The valuation is 20.2x its FY24 EPS, which is considered reasonable. Analysts expect growth in the global yarn industry driven by increasing apparel demand and e-commerce expansion. Anand Rathi recommends a “Subscribe – Long Term” rating for the IPO.
• Bajaj Broking: With consistent revenue growth, profitability, and a diversified presence across polyester, cotton, and technical textiles, the company is seen as a strong investment. Its strategic focus on capacity expansion and sustainability enhances its growth potential, prompting a recommendation for long-term subscription.
• SMIFS Ltd: The company’s significant capacity expansion plans and strategic initiatives position it well for future growth. With production capacity set to increase by 160% by FY27, SMIFS recommends subscribing for long-term gains.

Conclusion

Is Sanathan Textiles the Next Big IPO #4? Analysts are generally positive about Sanathan Textiles’ long-term prospects, with strong growth potential due to strategic initiatives in manufacturing and product innovation. Investors seeking long-term gains may find the IPO a solid opportunity.

 

Sanathan Textiles IPO: 10 Key Details to Know Before Subscription Opens on December 19

Is Sanathan Textiles the Next Big IPO #4? Sanathan Textiles, a polyester yarn manufacturer, is launching its initial public offering (IPO) to raise ₹550 crore. The IPO will open on December 19, 2024, and close on December 23. Here’s a breakdown of the key details:

1. IPO Dates: The Sanathan Textiles IPO will be open for subscription from December 19 to December 23, 2024.
2. Price Band: The price band for the IPO is set between ₹305 and ₹321 per share.
3. Lot Size: The lot size is 46 shares, requiring a minimum investment of ₹14,766 for retail investors.
4. IPO Structure: The total IPO size is ₹550 crore, comprising ₹400 crore from a fresh issue of 1.25 crore shares and ₹150 crore from an offer-for-sale (OFS) of 47 lakh shares.
5. OFS Details: The OFS portion includes shares from the promoter and related entities, including Paresh Dattan, Ajay Dattani, and others.
6. Allotment Process: IPO allotment will be finalized on December 24, with shares credited to demat accounts by December 26. Refunds for unsuccessful bidders will also be processed on the same day.
7. Listing Date: The listing of Sanathan Textiles shares is expected on December 27, 2024, on both BSE and NSE.
8. Use of Proceeds: The company plans to use the funds for repaying borrowings, investing in its subsidiary Sanathan Polycot Pvt Ltd, and for general corporate purposes.
9. Reservation: The IPO reserves 50% of the shares for Qualified Institutional Buyers (QIB), 35% for retail investors, and 15% for Non-Institutional Investors (NII).
10. Grey Market Premium (GMP): Sanathan Textiles is currently commanding a grey market premium of ₹25 per share, indicating a price of ₹346 per share in the grey market, or a 7.79% premium to the upper IPO price of ₹321.

Investors are advised to consult certified experts before making any investment decisions.