Sanathan Textiles Limited IPO

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They are one of the few companies in India, among their peer group, with a diverse presence across the polyester, cotton, and technical textile sectors. These sectors cater to multiple end-use segments such as automotive, healthcare, construction, sports and outdoor, and protective clothing. According to the CRISIL Report, they achieved a market share of 1.7% in the overall Indian textile yarn industry based on operating income as of Fiscal 2024.

Key Strengths and Diversification:

Integrated Yarn Verticals:
i. All three yarn verticals—polyester, cotton, and technical textiles—are housed under a single corporate entity.
ii. This integration has facilitated:
a. Diversification into new segments.                b. Ability to serve a broad customer base across various industries.

Extensive Product Portfolio:
i. As of September 30, 2024, they have: 3,200+ active yarn varieties manufactured between April 1, 2021, and September 30, 2024 and 45,000+ Stock Keeping Units (SKUs) actively in circulation.
ii. Production Capability: Ability to manufacture a diversified portfolio of over 14,000 yarn varieties and more than 190,000 SKUs and these products find applications across varied forms and end-uses.

Focus on Value-Added Products:
i. They hold a high share of value-added products that include:
a. Dope dyed yarn                           b. Superfine/micro yarn                   c. Functional, industrial, and technical yarn
d. Cationic dyeable yarn                e. Specialty yarn

ii. These products are the result of extensive in-house research and are tailor-made to meet customer requirements.
iii. The distinctive characteristics and properties of these products provide significant differentiation within the market.

Summary:

Their diversified product portfolio, integration of three yarn verticals under a single entity, and emphasis on value-added, research-driven products position them as a significant player in the Indian textile yarn industry. With over 14,000 product varieties and a robust 1.7% market share as of Fiscal 2024, they continue to meet the dynamic needs of customers across diverse industrial applications.

Objects of the Sanathan Textiles Limited IPO:

The company proposes to utilise the Net Proceeds towards the following objects: i. Repayment and/ or pre-payment, in full or part, of certain borrowings availed by the Company; ii. Investment in their subsidiary viz. Sanathan Polycot Private Limited, for repayment and/ or pre-payment, in full or part, of certain borrowings availed by their subsidiary viz. Sanathan Polycot Private Limited; and iii. General corporate purposes. Total number of share issue :- i. Fresh issue is 1,24,61,060 shares, ii. Offer for sale is 46,72,898 shares.
DRHP of Sanathan Textiles Limited IPO
RHP of Sanathan Textiles Limited IPO

Sanathan Textiles Limited IPO Details:

Open Date: Dec 19 2024
Close Date: Dec 23 2024
Total Shares: 1,71,33,958
Face Value: ₹ 10 Per Equity Share
Issue Size: 550.00 Cr.
Lot Size: 46 Shares
Issue Price: ₹ 305 - 321 Per Equity Share
Listing At: NSE,BSE
Listing Date: Dec 27 2024

Promoters And Management:

Paresh Vrajlal Dattani, 64, is the Chairman and Managing Director of the Company, serving on the Board since October 10, 2005. A science graduate from the University of Calcutta, he oversees the company’s overall performance, growth strategies, and leadership guidance. With 46 years of experience in the textile industry, he has also been a partner at Ramniklal Nandlal Bros since 1978. Ajay Vallabhdas Dattani, 57, is the Joint Managing Director of the Company and has been on the Board since October 10, 2005. A commerce graduate (honors) from the University of Calcutta, he oversees operations and expansion of the cotton division, along with finance, production, and compliance. He brings over 18 years of experience in the textile industry. Anilkumar Vrajdas Dattani, 66, is an Executive Director of the Company and has been on the Board since October 10, 2005. A commerce graduate from the University of Bombay, he oversees corporate social responsibility and administration. He has 46 years of experience in the textile industry and has been a partner at Ramniklal Nandlal Bros since 1978.

Financials of Sanathan Textiles Limited IPO:

In Cr.
Particulars June 30, 2024 March 31, 2024 March 31, 2023 March 31, 2022
Revenue from Operations 781.13 2,957.50 3,329.21 3,185.32
EBITDA 76.43 226.58 259.53 537.61
EBITDA Margins 9.79% 7.66% 7.80% 16.88%
PAT 50.07 133.85 152.74 355.44
PAT Margins 6.41% 4.53% 4.59% 11.16%
ROCE 14.04% 11.80% 15.54% 35.83%
CFOA 30.05 191.73 362.31 294.55

Comparison With Peers:

Companies Revenue EBITDA PAT D/E Ratio MCap P/E
Sanathan Textiles  (FY 2024) 2,957.50 Cr. 226.58 Cr. (7.66%) 133.85 Cr. (4.53%) 0.49 2,709.37 Cr. 20.24*
K.P.R. Mill (TTM) 6,028 Cr. 1,218 Cr. (20%) 809 Cr. (13.42%) 0.08 38,582 Cr. 47.70
Vardhman Textiles (TTM) 9,600 Cr 1216 Cr. (13%) 801 Cr. (8.34%) 0.10 15,759 Cr. 19.80
Indo Count Industries (TTM) 3,784 Cr. 572 Cr. (15%) 309 Cr. (8.17%) 0.66 7,710 Cr 25
Filatex India (TTM) 4,212 Cr. 244 Cr. (6%) 116 Cr. (2.75%) 0.18 2,957 Cr. 25.60
Garware Technical Fibres (TTM) 1,428 Cr. 301 Cr. (21%) 226 Cr. (15.83%) 0.13 9,083 Cr. 40.30
* Forward PE on the basis FY 25 PAT is 13.53.

Recommendation on Sanathan Textiles Limited IPO:

Review and Recommendation of Sanathan Textiles IPO by team IZ is 3/10.

Lead Manager of Sanathan Textiles Limited IPO:

  1. DAM Capital Advisors Ltd (Formerly IDFC Securities Ltd)
  2. ICICI Securities Limited

Registrar of Sanathan Textiles Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

Sanathan Textiles Limited SRV NO. 187/4/1/2, Near Surangi Bridge, Surangi, Dadra & Nagar Haveli, Silvassa 396230 Phone: +91 22 6634 3312 Email: investors@sanathan.com Website: https://www.sanathan.co/

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