Sanathan Textiles Ltd IPO

We are one of the few companies (amongst our peer group) in India with presence across the polyester, cotton and technical textile (which find application in multiple end-use segments including automotive, healthcare, construction, sports and outdoor, and protective clothing) sectors.

Focus on the product development of new products, through process innovation.

Fully integrated yarn manufacturing plant set up at a strategic location with equipment supplied by domestic and globally renowned players.

Long standing association with leading consumer brands with a low customer concentration.

Deep knowledge and understanding of optimal product assortment and strong supplier network enabling procurement at predicable and competitive pricing, leading to an overall efficient cycle.

Healthy financial performance.

Experienced management team with a proven track record.

The company does not have long term agreements for supply of its raw materials. If the company is unable to procure raw materials of the required quality and quantity, at competitive prices, its business, results of operations and financial condition may be adversely affected. Majority of its raw materials are sourced from few key suppliers. Discontinuation of operations of such suppliers may adversely affect its ability to source raw materials at a competitive price.

If the company is unable to gauge the demand of its products accurately and are unable to maintain an optimal level of inventory, its business, results of operations and financial condition may be adversely affected.

Any variation in the utilization of the Net Proceeds as disclosed in this Red Herring Prospectus shall be subject to certain compliance requirements, including prior Shareholders approval.

Its relationship with the company distributors is critical to its business. During quarter ended June 30, 2024, Fiscals 2024, 2023 and 2022, 96.55% 94.48%, 93.01% and 93.31%, respectively, of its total revenue from operations was attributable to its distributors. If the company is unable to maintain successful relationships with its distributors, the company business, results of operations and financial condition may be adversely affected.

Its may not be able to successfully manage the growth of the company business if its not able to effectively implement the company strategies. In particular, the proposed increase in its manufacturing capacities may not be successful or its may not have demand for the company products which may be commensurate to the proposed increase of its manufacturing capacities.

The Company has a high working capital requirement and if the Company is unable to raise sufficientworking capital the operations of the Company will be adversely affected. The company is in the advanced stages of commissioning a manufacturing facility in Wazirabad, Punjab through its Subsidiary, Sanathan Polycot Private Limited. Once this Subsidiary is operational, then it will also have to arrange for further funding for additional working capital requirement.

Its revenue from operations and the company PAT Margin has reduced in Fiscal 2024 as compared to Fiscal 2023. If the company is unable to maintain or increase its revenue from operations, the company profit and its profit margin, then it may have an adverse effect on the companys business operations and its growth strategies.

During quarter ended June 30, 2024, Fiscals 2024, 2023 and 2022, the company derived 62.51%, 65.10%, 60.88% and 55.63% its revenue from operations from domestic sales from the company customers in Gujarat, Maharashtra and Punjab, which exposes it to risks specific to these Indian geographies and market.

Any losses, on account of foreign currency exchange rate fluctuations may adversely affect its business, results of operations and financial condition.

The Offer Price, market capitalization to total income multiple, price to earnings ratio and enterprise value to EBITDA ratio based on the Offer Price of the Company, may not be indicative of the market price of the Equity Shares on listing.