Sonaselection India Ltd. IPO

Sonaselection India

• Sonaselection India is coming out with a 100% book building; initial public offering (IPO) of 1,43,00,000 shares of face value Rs 10 each in a price band Rs 94-99 per equity share.
• Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
• The issue will open for subscription on September 17, 2026 and will close on September 21, 2026.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 10 and is priced 9.40 times of its face value on the lower side and 9.90 times on the higher side.
• Book running lead manager to the issue is Choice Capital Advisors.
• Compliance officer for the issue is Harish Sharma.

Profile of the company

Sonaselection India is an integrated fabric manufacturing and processing company engaged in the production of value-added products. Leveraging advanced technology, well established production capabilities and stringent quality systems, it converts raw textiles into finished, high-quality fabrics. Its model enables it to offer a diversified product portfolio, maintain consistent quality, support innovation in fabric development and provide its customers with reliable, cost-efficient and timely solutions, thereby positioning it as a preferred partner for brands seeking consistency, innovation and faster delivery timelines. It specializes in the manufacturing of 100% cotton fabric, cotton lycra (stretch) fabric, cotton blends, polyester blends, and in the processing of fabric including 100% cotton, cotton blends, polyester-viscose (P/V) and polyester fabric.

Its manufacturing facility is equipped with modern machinery for high-precision textile processing. By managing transportation, technical processing, and final grading entirely in-house, the company minimizes lead times, mitigates third-party risks, and ensures consistent, superior product quality for its clients. Its manufacturing process commences with (i) procurement of greige fabric from third-party suppliers; or (ii) procurement of yarn, which is subsequently converted into greige fabric through outsourced job work arrangements undertaken in accordance with its technical specifications. Upon receipt of the greige fabric, all subsequent processing operations, including bleaching, dyeing and finishing, are carried out in-house at its manufacturing facility. Through these processes, it converts greige fabric into finished fabric of the requisite quality, specifications and end-use requirements.

Proceed is being used for: 

• Repayment and/or pre-payment, in full or part, of certain borrowings availed by the company from banks
• Funding of capital expenditure towards purchase of plant and machineries at the existing manufacturing facility situated at located at 18th K M Stone, Chittorgarh Road, Hamirgarh, Bhilwara, Rajasthan
• General corporate purposes

Industry overview

The Indian textile and apparel industry spans a vast, interconnected value chain, starting from the cultivation of natural fibres and production of synthetic materials to spinning, weaving, processing, apparel manufacturing, and retail. As the world’s second-largest producer of textiles and garments and the third-largest exporter, India holds a significant position in the global market. The sector contributes around 13% to industrial production, 2.3% to GDP, and 12% to national exports. The Indian textile and apparel industry is set to grow from $188 Billion in FY26 to $350 Billion in FY30, with a 16.8% CAGR driven by rising domestic and export demand.

The fabrics segment is the largest component of the Indian textile market, accounting for approximately 50-60% of the industry's value. It includes woven, knitted, denim, processed, and technical fabrics and benefits from India's extensive weaving and processing capabilities. The yarn segment contributes around 18-22% of the market and comprises cotton, polyester, blended, and filament yarns. India is among the world's leading producers and exporters of yarn, supported by a strong spinning industry. The made-ups segment accounts for approximately 12-18% of the market and includes home textiles such as bed linen, towels, curtains, and furnishings. Growth in exports and rising domestic demand continue to support this segment. The fibre segment represents around 8–12% of the market and includes cotton, polyester, viscose, wool, silk, and other fibres. Increasing adoption of man-made fibres and technical textiles is expected to drive future growth across the industry.

The Indian Government has been implementing various policy initiatives and schemes for supporting the development of textile sector. These schemes and initiatives are created to promote technology upgradation, creation of infrastructure, skill development and sectoral development in the textile sector. Moreover, these initiatives focus on creating a conducive environment and provide enabling conditions for textile manufacturing in the country which will help in boosting the textile sector. The Union Budget 2026-27 places Textiles at the centre of growth strategy with focus on employment, exports, rural livelihoods and sustainable manufacturing. Further, previously, the government announced various incentives/schemes towards increasing the global competitiveness of the Indian textile industry which includes the extension of Rebate of State and Central Taxes and Levies (RoSCTL), Remission of Duties and Taxes on Export Products (RoDTEP), Production Linked Incentive Scheme (PLI) and PM Mega Integrated Textile Region and Apparel (PM MITRA). 

Pros and strengths 

Integrated business model combining manufacturing and job work activities: The company operates an integrated business model that combines in-house manufacturing with job-work processing, enabling it to maintain operational flexibility, strengthen quality control, and optimize the utilization of its installed capacity. It commenced its operations with a strategic acquisition of an established textile processing unit. With the expansion of its customer base, it identified the need to exercise greater control over product quality, production parameters, and delivery timelines. As part of its strategic initiative to transition from a job-work–based model to a manufacturing-led business, the company established its own cotton processing plant, which began operations in July 2024. The integration of manufacturing into its operations has enabled it to convert greige fabric into finished fabric in-house, thereby improving oversight over quality, production scheduling, cost efficiency, and product consistency, and strengthening its position within the fabric value chain.

Strong standing relationships with customers with high retention rate: The company has built a foundation of trust and reliability among its customers across the market. Its ability to offer fabric tailored to meet specific quality, volume and delivery requirements has enabled it to cultivate strong standing partnerships and deliver consistent customer satisfaction. During Fiscal 2026, Fiscal 2025 and Fiscal 2024, it catered to 909, 417 and 191 customers, respectively. There were 132 customers who contributed to its revenue who have maintained an ongoing relationship with it for at least 3 reporting periods. It derived revenue of Rs 1,041.33 million, Rs 1,083.77 million and Rs 1,109.78 million during the Fiscal 2026, Fiscal 2025 and Fiscal 2024 which constituted 20.14%, 34.30% and 91.73% of its revenue from operations respectively, from such customers who have been associated with the company for at least three reporting periods.

Healthy track record and steady growth: The company has demonstrated consistent growth in its scale of operations, revenues and profitability over the past three Fiscals. The company’s revenue from operations has increased by a CAGR of 106.71% from Fiscal 2024 to Fiscal 2026. Similarly, its EBITDA and profitability have increased at a CAGR of 72.51% and 61.19% respectively, from Fiscal 2024 to Fiscal 2026.

Strategically located manufacturing facility with modern technologies: The company operates through its manufacturing facility located in Bhilwara, Rajasthan, a region that is recognised as the ‘Textile City’ or “Manchester City of Rajasthan”. Bhilwara, Rajasthan hosts an integrated textile ecosystem comprising more than 400 spinning, weaving and dyeing units, offering a comprehensive fibre-to-fabric value chain. Its presence within this established ecosystem enables it to access a reliable network of suppliers, skilled manpower and ancillary support services, thereby strengthening its manufacturing capabilities and operational efficiency. Its plant is designed to meet environmental compliance standards and is equipped to handle end-toend processing of cotton fabrics. By centralizing operations within a single location, it minimizes material handling, reduce production lead times and enhance coordination across process stages. This results in process control, increased operational efficiency, and better consistency in output quality.

Risks and concerns

Geographic concentration risk in Rajasthan: The company’s maximum revenue come from Rajasthan. A significant portion of the company’s revenue is derived from Rajasthan, amounting to Rs 1,928.80 million, Rs. 1,594.57 million and Rs. 1,153.06 million, constituting 37.31%, 50.47% and 95.31% of its total revenue from operations for Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively. Its procurement from Rajasthan amounted to Rs 3,448.05 million, Rs 2,587.97 million and Rs 505.83 million constituting 96.01%, 98.36% and 96.26% of purchases for Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively. This operational and commercial concentration in Rajasthan exposes it to significant geographic concentration risks. Any local or regional disruptions such as changes in state regulations, labour unrest, infrastructure bottlenecks, natural calamities such as floods, droughts, or earthquakes, industrial accidents, political or social unrest, or public health emergencies, could have a direct and adverse impact on both its production and sales functions.

Dependence on limited number of suppliers: The company depends on a certain limited set of suppliers for the supply of primary raw materials. Its procurement of raw materials from its top ten suppliers is Rs 2,114.09 million, Rs 2,124.48 million and Rs 407.37 million constituting 58.87%, 80.74% and 77.52% of its overall procurement for the Fiscal 2026, Fiscal 2025 and Fiscal 2024 respectively. Any loss of suppliers or interruptions in the timely delivery of supplies and services could have an adverse impact on its business, financial condition, cash flows and results of operations.

Volatility in yarn and greige fabric prices and availability: Its manufacturing operations are significantly dependent on the availability and cost of yarn and greige fabric, which constitute its primary raw materials for fabric manufacturing. Any fluctuations in the price or availability of these inputs can materially impact its production schedules, cost structure, and overall profitability. The price of cotton yarn has seen significant fluctuations in recent years and is influenced by several factors that are largely beyond its control, such as global supply chain disruptions, demand variations, and input cost pressures, climatic disruptions including droughts or floods, government procurement policies. Its procurement model involves sourcing yarn and greige fabric through suppliers across key producing regions in India, and it does not typically enter into long-term fixed-price contracts with such suppliers. While this model offers flexibility and access to competitive pricing, it also exposes it to considerable risks of supply disruption and price spikes, particularly during periods of high demand.

Dependence on third-party logistics and transportation providers: The company is dependent on third-party logistics and transportation providers for (i) the movement of its raw material i.e. yarn and greige fabric and other inputs from its suppliers to its Manufacturing Facility, and (ii) the delivery of its finished products to its customers across various states in India. Any delay, disruption, or inefficiency in the logistics network may impair its ability to maintain smooth operations or timely order fulfilment. Delays in transportation can arise from multiple external factors including labour strikes, fuel price volatility, adverse weather, road blockages, natural disasters, public health emergencies and regulatory changes affecting freight movement. Additionally, products and raw materials in transit may be exposed to risks such as theft, mishandling, damage, or loss, which could result in quality degradation or shortfall in quantity at destination.

Outlook

Sonaselection India is engaged in manufacturing and processing of all type of textile fabrics. It specializes in the manufacturing of 100% cotton fabric, cotton lycra (stretch) fabric, cotton blends, polyester blends, and in the processing of fabric including 100% cotton, cotton blends, polyester-viscose (P/V) and polyester fabric. On the concern side, the Indian textile industry is fragmented, with a mix of large integrated manufacturers and smaller regional players. It primarily competes on the basis of product quality, customer relationships, pricing, and timely delivery. Its key competitors include established domestic players with larger capacities, vertically integrated textile groups. Any inability to respond to pricing pressures, technological developments or industry consolidation could negatively affect its operations, market share and financial results.

The issue has been offering 1,43,00,000 shares in a price band of Rs 94-99 per equity share. The aggregate size of the offer is around Rs 134.42 crore to Rs 141.57 crore based on lower and upper price band respectively. Minimum application is to be made for 150 shares and in multiples thereof thereafter. On performance front, its total income has increased by 63.56% from Rs 3,164.66 million in fiscal 2025 to Rs 5,175.96 million in fiscal 2026. The company’s net profit stood at Rs 340.23 million in Fiscal 2026, as compared to Rs 185.63 million in Fiscal 2025, representing an increase of 83.28%.

Meanwhile, it intends to diversify its product portfolio and expand its market presence by entering the technical textiles segment, which is a growing and innovation-driven sector catering to specialised industrial applications. Technical Textiles are specially designed for performance and functionality rather than aesthetics. They are used in fields such as medicine, construction, automotive, agriculture, and defence. Its existing manufacturing capabilities, experience in finished fabrics and investments in modern technologies provide it with a strong foundation to expand into the technical textiles segment. It intends to leverage its existing infrastructure and machinery, including its manufacturing capabilities, to manufacture specialised fabrics designed to meet industry-specific performance and quality requirements.

A fair growth of 23.43% in the revenue at Rs. 13319.00 millions was reported in the September 2026 quarter as compared to Rs. 10790.90 millions during year-ago period.A good growth in profit of 37.74% reported to Rs. 1662.80  millions over Rs. 1207.20 millions of corresponding previous quarter.The company reported a good operating profit of 2622.10 millions compared to 1941.80 millions of corresponding previous quarter.

(Rs. in Million)

	Quarter ended			Year to Date			Year ended
	202609	202509	% Var	202609	202509	% Var	202603	202503	% Var
Sales	13319.00	10790.90	23.43	25219.80	20864.10	20.88	43743.10	42188.20	3.69
Other Income	233.70	218.20	7.10	456.80	404.60	12.90	792.90	678.50	16.86
PBIDT	2622.10	1941.80	35.03	5037.40	3587.80	40.40	7741.50	5577.30	38.80
Interest	24.10	21.10	14.22	46.20	37.90	21.90	87.20	88.80	-1.80
PBDT	2547.10	1920.70	32.61	4940.30	3549.90	39.17	7437.20	4364.70	70.39
Depreciation	303.90	294.30	3.26	603.10	582.90	3.47	1179.20	1172.20	0.60
PBT	2243.20	1626.40	37.92	4337.20	2967.00	46.18	6258.00	3192.50	96.02
TAX	580.40	419.20	38.45	1116.70	763.10	46.34	1690.30	1151.10	46.84
Deferred Tax	-13.10	-2.20	495.45	-27.20	-6.00	353.33	-17.30	-22.50	-23.11
PAT	1662.80	1207.20	37.74	3220.50	2203.90	46.13	4567.70	2041.40	123.75
Equity	157.10	159.30	-1.38	159.30	159.30	0.00	159.30	159.30	0.00
PBIDTM(%)	19.69	17.99	9.40	19.97	17.20	16.15	17.70	13.22	33.87

The Revenue for the quarter ended  September 2026 of Rs. 159477.30 millions grew by 16.84 % from Rs. 136494.10 millions.The company has announced a 29.47% increase in its profits to Rs . 42119.70  millions for the  quarter ended September 2026 compared to Rs. 32533.30 millions in the corresponding quarter in the previous year.

(Rs. in Million)

	Quarter ended			Year to Date			Year ended
	202609	202509	% Var	202609	202509	% Var	202603	202503	% Var
Interest Earned	159477.30	136494.10	16.84	304252.20	274859.50	10.69	555639.70	529197.30	5.00
Other Income	31935.60	25891.80	23.34	65317.60	56691.60	15.22	116232.90	114184.90	1.79
Interest Expended	74887.60	63386.70	18.14	140378.20	129159.20	8.69	255539.00	245779.50	3.97
Operating Expenses	52703.30	52703.30	13.79	104056.10	94072.30	10.61	195664.60	187537.00	4.33
Operating Profit	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Prov.& Contigencies	8035.60	9474.20	-15.18	14716.90	21551.80	-31.71	34811.80	29423.60	18.31
Tax	13666.70	10675.20	28.02	27069.30	21417.70	26.39	45780.20	51340.30	-10.83
PAT	42119.70	32533.30	29.47	83349.30	65350.10	27.54	140077.00	164500.80	-14.85
Equity	9947.90	9943.00	0.05	9947.90	9943.00	0.05	9946.50	9941.10	0.05
OPM	40.02	38.60	3.69	41.13	39.41	4.36	39.71	39.70	0.05

The sales figure stood at Rs. 17347.20 millions for the September 2026 quarter. The mentioned figure indicates a growth of about 27.30% as compared to Rs. 13627.50 millions during the year-ago period.A slender decline of -22.58% was recorded to Rs. 1763.70  millions from Rs. 2278.00 millions in the corresponding previous quarter.A decline of 2754.40 millions was observed in the OP in the quarter ended September 2026 from 3351.00 millions on QoQ basis.

(Rs. in Million)

	Quarter ended			Year to Date			Year ended
	202609	202509	% Var	202609	202509	% Var	202512	202412	% Var
Sales	17347.20	13627.50	27.30	51514.30	42815.80	20.32	57215.00	53648.50	6.65
Other Income	134.00	123.00	8.94	507.40	538.00	-5.69	674.30	886.10	-23.90
PBIDT	2754.40	3351.00	-17.80	11362.70	10334.80	9.95	14149.50	13667.60	3.53
Interest	17.20	20.60	-16.50	52.90	70.10	-24.54	92.90	93.80	-0.96
PBDT	2737.20	3330.40	-17.81	11309.80	10264.70	10.18	13831.30	13573.80	1.90
Depreciation	303.40	251.70	20.54	884.60	763.40	15.88	1008.20	997.70	1.05
PBT	2433.80	3078.70	-20.95	10425.20	9501.30	9.72	12823.10	12576.10	1.96
TAX	670.10	800.70	-16.31	2762.70	2448.70	12.82	3323.80	3303.80	0.61
Deferred Tax	-10.30	-14.10	-26.95	-0.30	-50.80	-99.41	-107.00	-64.90	64.87
PAT	1763.70	2278.00	-22.58	7662.50	7052.60	8.65	9499.30	9272.30	2.45
Equity	4945.60	4945.60	0.00	4945.60	4945.60	0.00	4945.60	4945.60	0.00
PBIDTM(%)	15.88	24.59	-35.43	22.06	24.14	-8.62	24.73	25.48	-2.93

The sales for the September 2026 quarter moved up 45.27% to Rs. 5029.90 millions as compared to Rs. 3462.50 millions during the corresponding quarter last year.Profit after tax for the quarter ended September 2026 reported a huge growth of 96.40% to Rs. 349.60  millions from Rs. 178.00 millions.Operating Profit saw a handsome growth to 587.20 millions from 396.40 millions in the quarter ended September 2026.

(Rs. in Million)

	Quarter ended			Year to Date			Year ended
	202609	202509	% Var	202609	202509	% Var	202603	202503	% Var
Sales	5029.90	3462.50	45.27	9949.90	7315.80	36.01	17101.70	17541.10	-2.50
Other Income	118.60	133.30	-11.03	251.10	276.90	-9.32	494.80	701.50	-29.47
PBIDT	587.20	396.40	48.13	1158.30	753.00	53.82	1453.60	1814.90	-19.91
Interest	3.40	44.30	-92.33	7.50	55.00	-86.36	87.60	84.30	3.91
PBDT	583.80	352.10	65.81	1150.80	698.00	64.87	1366.00	1730.60	-21.07
Depreciation	116.20	111.30	4.40	232.20	226.60	2.47	449.80	452.40	-0.57
PBT	467.60	240.80	94.19	918.60	471.40	94.87	916.20	1278.20	-28.32
TAX	118.00	62.80	87.90	233.10	122.80	89.82	238.40	232.60	2.49
Deferred Tax	5.50	-6.90	-179.71	-1.40	-13.60	-89.71	-23.80	-11.20	112.50
PAT	349.60	178.00	96.40	685.50	348.60	96.64	677.80	1045.60	-35.18
Equity	120.40	120.40	0.00	120.40	120.40	0.00	120.40	120.40	0.00
PBIDTM(%)	11.67	11.45	1.97	11.64	10.29	13.10	8.50	10.35	-17.85