Company Overview

Sonaselection India Limited is an integrated textile manufacturing and processing company based in Bhilwara, Rajasthan, specializing in 100% cotton fabric, cotton lycra, cotton blends, and polyester blends. The company operates a single manufacturing facility with 82.44 million meters per annum capacity and has recently expanded into ready-made garments through its wholly-owned subsidiary Sionnah Enterprises Private Limited. The company has demonstrated significant growth, transitioning from job-work to integrated manufacturing operations.

Offer Details

The Initial Public Offering (IPO) comprises a fresh issue of up to 14.3 million equity shares at a price band of ₹94-99 per share, aiming to raise ₹1,415.70 million. The issue opens on September 17, 2026, and closes on September 21, 2026, with listing planned on both BSE and NSE. Book Running Lead Manager is Choice Capital Advisors Private Limited, with Kfin Technologies Limited as registrar.

Financial Performance

The company has shown remarkable financial growth with revenue increasing from ₹1,209.79 million in FY2024 to ₹5,169.49 million in FY2026 (106.71% CAGR), while profit after tax grew from ₹130.95 million to ₹340.23 million (61.19% CAGR). EBITDA reached ₹847.74 million in FY2026 with margins of 16.40%. The capital structure shows pre-IPO paid-up capital of ₹425.29 million, increasing to ₹568.29 million post-IPO. Debt levels remain elevated with debt-to-equity ratio of 2.48 in FY2026, which the IPO aims to address.

Use of Proceeds

Net proceeds of ₹1,306.37 million will be utilized for:

  • ₹800 million for repayment/prepayment of borrowings from SBI Bank, Axis Bank, and HDFC Bank
  • ₹506.11 million for capital expenditure including continuous dyeing range and warping machines
  • ₹0.26 million for general corporate purposes
  • Balance for issue expenses (₹109.33 million total)

Risk Factors

Business Risks: Geographic concentration with 37.31% revenue from Rajasthan, customer concentration (top 10 customers contribute 29.45% of revenue), supplier concentration (top 10 suppliers constitute 58.87% of purchases), working capital intensive operations (134 days), and high debt levels.

Market Risks: First-time public issue, competitive textile industry with pricing pressures, economic condition dependence, and geopolitical tensions affecting exports.

Regulatory Risks: Compliance with SEBI ICDR Regulations, environmental regulations, past instances of statutory filing delays, and ongoing legal proceedings including MSME claims and criminal matters involving promoters.

Management & Promoters

Promoters include Harshil Nuwal (Managing Director, 17.07% pre-IPO), Deepank Bhandari (41.48%), Sona Polyspin Private Limited (27.66%), Subhash Chandra Nuwal (Chairman), and Uma Nuwal (Director). Pre-IPO promoter holding is 86.21%, reducing to 64.52% post-IPO. The management team has extensive textile industry experience ranging from 14-39 years.

Market & Industry Context

The Indian textile and apparel industry is valued at USD 188 billion in FY26, projected to reach USD 350 billion by FY30 with 16.8% CAGR. India is the world's second-largest producer of textiles and garments, contributing 2.3% to GDP, 13% to industrial production, and 12% to exports. Growth is driven by rising domestic consumption, export potential, government support through PLI schemes and PM MITRA parks, and shifting global supply chains away from China.

Legal & Compliance

The company has obtained SEBI observation, BSE and NSE in-principle listing approvals, and various business licenses. Ongoing legal proceedings include an MSME claim of ₹2.45 million and criminal matter (FIR No. 05/2015) involving promoters. The company maintains certifications including OEKO-TEX® Standard 100, GOTS, OCS, GRS, and has zero liquid discharge status with Rajasthan Pollution Control Board.

Additional Details

Key performance indicators show EBITDA margin of 16.40%, net profit margin of 6.58%, return on net worth of 39.05%, and debt service coverage ratio of 1.70 times. CRISIL has awarded a long-term rating of BBB/Stable. The employee strength has grown from 486 in FY2024 to 979 as of July 2026. Lock-in requirements include 20% of promoters' shareholding locked for 18 months and anchor investor shares locked for 30-90 days.