Sitaram Denims India Ltd has submitted draft papers to Sebi, the capital markets regulator, for a proposed initial public offering (IPO). The Bhilwara-based woven fabric maker disclosed the filing in its Draft Red Herring Prospectus (DRHP), which was lodged on Wednesday.
The offer has two parts. The company plans to issue 2.64 crore new equity shares. It also proposes an offer for sale (OFS) of 44.71 lakh shares by its promoters, Madhu Nuwal, Mamta Nuwal and Sangeeta Nuwal.
The company has laid out how it intends to use the money raised from the fresh issue. Rs 40 crore will go towards repaying or prepaying outstanding borrowings. Rs 41.37 crore is earmarked for setting up a readymade garment manufacturing unit in Bhilwara, and Rs 23.23 crore will fund working capital needs. The rest will be used for general corporate purposes.
Sitaram Denims makes both branded and unbranded woven fabrics, mainly for the apparel industry. Its range covers cotton-spandex, rigid cotton, denim, polyester-viscose and other blended fabrics.
Capacity figures in the filing show the scale of its current operations. The company’s weaving capacity stands at 25.20 million metres a year, and its sizing capacity is 6 million kg a year.
The garment unit is central to its expansion plans. The facility will be built at Banera, also in Bhilwara, and is expected to produce 3.12 million garments annually.
SMC Capitals is the book-running lead manager for the issue, and Bigshare Services will act as the registrar. The filing is the first formal step in the IPO process. Sebi will review the papers before the company can proceed with the offer.
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