New IPO Alert: Sitaram Denims India files DRHP with SEBI for public offer

Denim and textile manufacturing company Sitaram Denims India has filed preliminary papers with the market regulator, the Securities and Exchange Board of India, to raise funds through an initial public offering.

The proposed initial share sale is a mix of a fresh issuance of 26,467,000 equity shares and an offer for sale (OFS) component of 4,471,000 shares by promoters Madhu Nuwal, Sangeeta Nuwal and Mamta Nuwal.

The fresh funds will be used for debt clearance, funding proposed expansion towards establishing a readymade garment manufacturing unit, working capital needs and general corporate purposes.

"Our company expects to receive the benefits of listing of the equity shares on the Stock Exchanges and enhancement of our company’s visibility and brand image and creation of a public market for our equity shares in India," the company said in its red herring prospectus.

Sitaram Denims India makes and supplies branded and unbranded woven fabrics, serving various categories within the apparel segment. Its principal product categories comprise rigid cotton fabrics, cotton-spandex fabrics, denim fabrics, polyester-viscose fabrics and other blended fabrics.

It manufactures mainly on a make-to-stock basis, with production planning and product mix guided by conventional market demand and customer-specific needs, including specifications related to fibre composition, fabric construction, width, design, weight, finish and other technical parameters.

Its products are primarily sold in the domestic market. It also caters to international markets through direct exports and sales to merchant exporters. "In the domestic market, we principally serve business-to-business customers, including textile and apparel manufacturers, wholesalers and other participants in the textile industry," the firm said.

Half of the net offer is reserved for qualified institutional buyers, 35% for retail investors and 15% for non-institutional investors.

SMC Capitals is the issue's sole book-running lead manager, while Bigshare Services serves as the registrar.

The company's shares are proposed to be listed on the National Stock Exchange (NSE) and the BSE.