Sanathan Textiles Limited is planning to raise Rs 1,200-1300 crore through an initial primary offer for which it is likely to file a draft red herring prospectus (DRHP) with the market regulator, Sebi this week. The issue would be a mix of fresh issuance and offer for sale (OFS) for existing shareholders, two sources close to the development said.

“Edelweiss Financial Services Limited and  JM Financial  NSE -0.52 % Limited have been appointed as book-running lead managers to the issue,” said one of the persons cited above. Sanathan Textiles did not respond to queries from ET till press time. According to India Ratings and Research (Ind-Ra) report published in December, Sanathan Textiles’ margin increased to 17.8% in the first half of FY 2022 owing to higher comprehension, lower raw material prices, and the management’s cost-reduction initiatives.
The company recorded operating earnings (Ebitda) of Rs 260.4 crore in 1HFY22 and the agency expects the same to be supported by higher volumes in FY22, with the completion of Capex in cotton yarn, industrial drawn yarn (IDY), and Sanathan  Polycot  Pvt Ltd (SPPL). “This will be the first IPO after a decade in the textile industry space,” a person close to the development said.

The last mainboard textiles industry IPO was  Pradip Overseas  NSE 0.00 %, which came out in 2010 raised Rs 116.60 crore, Yash Birla group’s textile manufacturing company,  Birla Cotsyn  NSE 0.00 % raised Rs 144.18 crore in 2008, and Tamil Nadu-based apparel company  KPR Mill  NSE 1.58 % raised Rs 133 crore in 2007.

Recently, Ahmedabad-based Nandan Terry, a fully vertically integrated company engaged in the principal business of manufacturing terry towels & toweling products has filed its draft red herring prospectus (DRHP) with the market regulator to raise Rs 254.96 crore through its public issue.