The ₹550-crore initial public offering from yarn manufacturer Sanathan Textiles received a modest response from investors on Day 1 on Thursday. The IPO was subscribed 0.45 times overall. The issue, with a price band of ₹305-321, will remain open till December 23. Investors can bid for a minimum of 46 shares.
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 promoter group entities.
Up to 50 per cent of the issue has been reserved for qualified institutional buyers, 35 per cent for retail investors and the remaining 15 per cent for non-institutional investors.
The QIB portion was yet to see bidding, while the quota for NIIs and retail investors was subscribed 0.32 times and 0.76 times respectively.
As part of the IPO exercise, Sanathan Textiles on Wednesday raised ₹165 crore from anchor investors. The company has allotted 51.4 lakh shares to 20 funds at ₹321 apiece, which is also the upper end of the price band.
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 anchor investors.
The Maharashtra-based company plans to utilise the proceeds from its fresh issue worth ₹160 crore for payment of debt, ₹140 crore will be invested in its subsidiary, Sanathan Polycot Pvt Ltd, for the repayment or prepayment of its borrowings, and the remaining amount will be allocated for general corporate purposes.
Sanathan Textiles is engaged in manufacturing textile yarn, which is divided into three separate business verticals consisting of polyester yarn products; cotton yarn products; and yarn for technical textiles and industrial uses, finding application in multiple end-use segments including automotive, healthcare, construction, sports and outdoor, and protective clothing. Currently, all the three yarn verticals are housed under a single corporate entity.
Dam Capital Advisors and ICICI Securities are the book-running lead managers to the issue. The equity shares are proposed to be listed on the BSE and the NSE.