The IPO of Sanathan Textiles is off to a modest start, with private investors showing increased interest.
The yarn maker’s ₹550 crore IPO has been subscribed a total of 1.45 times. The issue, with a price band of ₹305-321, received bids for shares of 1.80 crore, against 1.26 crore shares on offer.
The IPO is a combination of a fresh issue worth ₹400 crore and an offer for sale of shares for ₹150 crore by the promoters and the promoter group entities. Investors can bid on a minimum of 46 shares.
Up to 50 percent of the issuance is reserved for qualified institutional buyers, 35 percent for retail investors and the remaining 15 percent for non-institutional investors.
The QIB portion was yet to be bid (just 0.09 percent), while the quota for NIIs and retail investors was subscribed 1.53 times and 2.15 times respectively.
As part of its IPO exercise, Sanathan Textiles raised ₹165 crore from major investors on Wednesday. The company has allotted 51.4 lakh shares to 20 funds at ₹321 each, which is also the upper end of the price range.
SBI Mutual Fund, Nippon India MF, HDFC Mutual, Kotak MF, Bandhan MF, SBI General Insurance Company, Societe Generale and PineBridge Global Funds are among the top investors.
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The Maharashtra-based company plans to use the proceeds from its fresh issue worth ₹160 crore for debt servicing, ₹140 crore will be invested in its subsidiary, Sanathan Polycot Pvt Ltd, for repayment or prepayment of its loans, and the remaining The amount will be allocated for general corporate purposes.
Sanathan Textiles is engaged in the manufacturing of textile yarn, which is divided into three separate business sectors consisting of polyester yarn products; cotton yarn products; and yarn for technical textiles and industrial use, which has applications in multiple end-use segments, including automotive, healthcare, construction, sports and outdoor, and protective clothing. Currently, all three yarn verticals are under one corporate entity.
Dam Capital Advisors and ICICI Securities are the lead managers of the issue. It is proposed to list the shares on the BSE and NSE.
