Sanathan Textiles is all agog to raise funds through an Initial Public Offering (IPO). The Mumbai-based company has accorded its draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI). The shares of the company are proposed to be listed on NSE and BSE.
The textile company is one of the few companies in India with a presence across the polyester, cotton and technical textile sectors. As per market sources, the issue size will be in the range of Rs 1200-1300 crore.
The Yarn manufacturer plans to raise funds via Initial Public Offering which comprises of fresh issue of equity shares aggregating up to Rs 500 crore (The “Fresh Issue”) and an offer for sale of up to 11,400,000 equity shares (The “Offer for Sale”) by Dattani Family. Furthermore, the company has the consultation with the lead bankers to which may help with the issue and may consider a pre-IPO placement of equity shares aggregating up to Rs 100 crore.
Proceeds from the fresh issuance of shares will be used to extent of Rs 325 crore to repay/prepay in full or part, of certain borrowings availed by the company, Rs 65 crore for funding working capital requirements besides general corporate purposes. The final mainboard textiles business IPO was, which got here out in 2010 raised Rs 116.60 crore, Yash Birla group’s textile manufacturing firm, raised Rs 144.18 crore in 2008, and Tamil Nadu-based attire firm raised Rs 133 crore in 2007.
The business’ IPO will mix a fresh issuance and an offer for sale for existing shareholders, an anonymous source close to the development told ET Bureau. Edelweiss Financial Services Limited and JM Financial Limited have been appointed as book-running lead managers to the issue.