Bhilwara-based Sonaselection India, an integrated fabric manufacturing and processing company, has filed DRHP with the Securities and Exchange Board of India (SEBI). Sonaselection India IPO is entirely a fresh issue of 1.43 crore equity shares of face value INR 10 each. Choice Capital is the book-running lead manager, while Kfin Technologies is the registrar of the issue.
Sonaselection India IPO: Company Overview
Incorporated in 2022, Sonaselection India commenced operations through the strategic acquisition of an established textile processing unit on a slump-sale basis for INR 16.21 crore. Initially operating as a job-work processor, the company has since undergone a significant transformation into a full-fledged fabric manufacturer, with its cotton fabric processing plant becoming operational in July 2024.
The company operates from Bhilwara, Rajasthan, often referred to as the “Manchester of Rajasthan”, with a manufacturing facility spread across 49,540 square metres. The facility has an installed processing capacity of 82.44 million meters per annum, supported by modern machinery sourced from Italy, Germany, China, Switzerland, and the UK.
Sonaselection specializes in:
- 100% cotton fabric
- Cotton lycra (stretch) fabric
- Cotton blends
- Polyester and polyester-viscose blends
In addition to in-house manufacturing, the company continues to provide job-work processing services for third-party customers.
Shift in Revenue Mix Signals Strategic Transition
The company’s financials clearly reflect its strategic pivot from job-work to manufacturing:
- Manufacturing revenue contribution increased sharply from 2.53% in FY23 to 69.88% in FY25, and further to 78.21% in Q1 FY26.
- Job-work services, which once contributed over 97% of revenue in FY23, now account for 21.79% in the latest quarter.
This shift has materially improved scale, margins, and long-term value creation potential.
Sonaselection India IPO: Financials
Sonaselection has delivered exceptional financial growth over the last three fiscal years:
- Revenue from operations grew from INR 93.91 crore in FY23 to INR 315.95 crore in FY25, reflecting a CAGR of 83.42%.
- Profit after tax (PAT) surged from INR 2.51 crore in FY23 to INR 18.56 crore in FY25, translating into a PAT CAGR of 172%.
For the three months ended 30 June 2025, the company reported:
- Revenue of INR 104.24 crore
- EBITDA of INR 16.34 crore
- PAT of INR 4.80 crore
While EBITDA margins moderated to 15.68% in Q1 FY26 from 23.55% in FY24, the scale-up phase and expansion-related costs appear to be key drivers.
Sonaselection India IPO: Leverage & Use of Funds
As of the latest period:
- Debt-equity ratio stood at 2.81x, indicating a leveraged balance sheet typical of capital-intensive textile operations.
- The company proposes to use IPO proceeds primarily to repay and prepay borrowings, which should improve financial stability and reduce interest costs.
According to the DRHP, net proceeds from the IPO are proposed to be utilised for:
- INR 80 crore towards repayment/prepayment of certain borrowings
- INR 47.55 crore towards capital expenditure for plant and machinery
- Balance towards general corporate purposes
This allocation signals a clear focus on deleveraging and capacity enhancement.
Geographic Reach and Customer Base
The company has expanded its geographic footprint significantly:
- Rajasthan remains the largest market, though its contribution declined from over 95% in FY23 to 50.47% in FY25.
- Delhi, Maharashtra, Karnataka, and West Bengal have emerged as meaningful revenue contributors, indicating diversification beyond the traditional textile clusters.
Industry Tailwinds and Growth Outlook
The Indian textile and apparel industry is expected to grow from USD 174 billion (~INR 15.7 lakh crore) in FY24 to USD 350 billion (~INR 31.6 lakh crore) by FY30, driven by domestic consumption, export opportunities, supply-chain realignment away from China, and government initiatives such as PLI schemes and PM MITRA parks.
Additionally, Sonaselection’s recent foray into the readymade garments (RMG) segment through a subsidiary incorporated in July 2025 positions it to move further up the value chain.
Final Words
Sonaselection India IPO comes at a time when integrated textile players with manufacturing capabilities, sustainability focus, and scale are gaining investor attention. While leverage remains a key risk factor, the proposed use of IPO proceeds to reduce debt, coupled with strong revenue growth and operational transformation, makes this issue worth tracking.
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