Sonaselection India Opens Rs 141.6-Crore IPO With GMP Signalling 7% Listing Premium

Textile processing and fabric manufacturing firm Sonaselection India Limited has launched its initial public offering (IPO) for public subscription today, September 17. The book-built mainboard issue will remain open for bidding until September 21.

In the unlisted market, the company's shares are commanding a grey market premium (GMP) of Rs 7 over the upper price band, pointing to an estimated listing gain of approximately 7.1%.

Issue Structure and Key Offer Details

The public offer is entirely a fresh issue of 1.43 crore equity shares, aggregating to Rs 141.57 crore at the upper end of the price band, with no offer-for-sale (OFS) component from existing promoters.

• Price Band: Rs 94 to Rs 99 per equity share of face value Rs 10 each.
• Issue Size: 1,43,00,000 equity shares amounting to Rs 141.57 crore.
• Bidding Lot: 150 equity shares and in multiples of 150 shares thereafter.
• Minimum Investment: Rs 14,850 for retail investors applying for a single lot at the upper price band.
• Listing Bourses: BSE and National Stock Exchange of India (NSE).

Choice Capital Advisors Private Limited is the sole book-running lead manager to the offer, while KFin Technologies Limited is the registrar.

Important Timeline and Key Dates

The allotment of equity shares is tentatively scheduled to be finalized on September 22. Successful bidders are expected to have the shares credited to their demat accounts by September 23, with refunds initiated on the same day. Sonaselection India shares are expected to make their stock market debut on both the BSE and NSE on September 24.

Business Profile and Financial Background

Headquartered in Bhilwara, Rajasthan, Sonaselection India was incorporated in February 2022. The company operates as an integrated fabric manufacturing and processing enterprise. It initiated operations by acquiring a processing facility of Sona Processors (India) Limited on a slump-sale basis.

The company converts greige fabric into finished products, including 100% cotton, cotton-lycra stretch, and synthetic-blended textiles, along with undertaking job-work fabric processing services. Its operations are housed at an integrated manufacturing complex in Hamirgarh, Bhilwara.

Use of Net Proceeds

According to the red herring prospectus filed by the company, net proceeds from the fresh equity issuance will be allocated towards:

• Repayment or prepayment, in full or in part, of certain borrowings availed from banks.
• Funding capital expenditure for the purchase of plant and machinery at the existing Bhilwara manufacturing facility.
• General corporate purposes.

Tags: Sonaselection India IPO BSE NSE SEBI Textile Sector