Sanathan Textiles shares tumble 9% as anchor lock-in period expires

Shares of Sanathan Textiles tumbled over 9 per cent on Monday as anchor investors offloaded their holdings following the expiry of the lock-in period. 

 

Sanathan Textiles' stock fell as much as 9.04 per cent during the day to ₹312 per share, the biggest intraday loss since February 14 this year. The stock pared losses to trade 4.07 per cent lower at ₹329 apiece, compared to a 1.04 per cent advance in Nifty 50 as of 10:50 AM. 

 

Shares of the company snapped a four-day winning streak on Monday while they have fallen 9.4 per cent this year, compared to a 0.21 per cent fall in the benchmark Nifty 50. Sanathan Textiles has a total market capitalisation of ₹2,806.01 crore, according to BSE data. 

 

 

Anchor investors face a lock-in period of 30 days for 50 per cent of their allotted shares before the initial public offering, while the remaining 50 per cent is locked in for 90 days. This restriction prevents institutions from selling their shares immediately after listing, helping to stabilise the stock price and promote long-term confidence in the market. 

 

The company could see a potential selloff by anchor investors worth ₹82.5 crore as the first lock in for the company ended on January 23 this year. The company had allotted about 5.14 million shares at ₹321 apiece to 20 anchor investors, ahead of its IPO in December 2024. 

 

Shares of Sanathan Textiles made a debut on Dalal Street at a premium of 30.5 per cent to its issue price. The ₹550 crore IPO comprised a fresh issue and an offer for sale of equity shares. The public offering saw an overall subscription of 36.9 times. Qualified Institutional Buyers (QIBs) showed the highest demand, subscribing to 79.59 times the quota reserved for them. This was followed by Non-Institutional Investors (NIIs) at 44.39 times, and Retail Individual Investors (RIIs) at 9.31 times.

 

The company is a manufacture of polyester chips using purified terephthalic acid (PTA) and mono ethylene glycol (MEG) and convert the chips into polyester yarn through various intermediate processing to impart specific properties to the yarn.

 

As of September 30, 2024, Sanathan Textiles offered over 3,200 active yarn product varieties (produced between April 1, 2021, and September 30, 2024) and maintained more than 45,000 stock-keeping units (SKUs). The company also possesses the capacity to manufacture a versatile range of over 14,000 yarn product varieties and 190,000 SKUs for various applications and end-use purposes.