Sonaselection India Limited is opening for IPO. Operating out of a single integrated manufacturing facility in Bhilwara, Rajasthan, the textile manufacturer specializes in 100% cotton, lycra, and blended fabrics.
IPO Summary
| Sonaselection IPO Details | |
|---|---|
| IPO Date | 17th to 21st Sep, 2026 |
| Sale Type | 100% Fresh Issue |
| Tentative Listing Date | 24th Sep, 2026 |
| Price Band | ₹94 to ₹99 |
| Post Issue Mcap at ₹99 | ₹563 Cr |
| Total Listing Size | ₹142 Cr |
Introduction
The Indian textile and apparel industry is set to grow from $188 billion in FY26 to $350 billion in FY30, a CAGR of ~17%, driven by rising domestic demand, exports, and schemes like PLI and PM MITRA parks.
Within this, the textile processing segment alone was worth $159 billion in 2024, headed for $241 billion by 2030.
Sonaselection India Limited, a Bhilwara-based fabric processor, sits inside this market. Incorporated in 2022, it started by buying an existing processing unit, and has since grown more than 4x in three years.
They’re now going live in an IPO consisting of a Fresh Issue of ~₹142 Cr, from 17th to 21st Sep, 2026.
The Business Model
Sonaselection runs a single manufacturing plant in Bhilwara, Rajasthan, a town known in the textile trade as the Manchester of Rajasthan.
The process starts with either buying greige (unfinished) fabric from suppliers, or buying yarn and converting it to greige fabric via outsourced job-work. From there, Sonaselection does everything in-house: bleaching, dyeing and finishing.
The company earns from three verticals:
- Manufacturing (where it owns the material and sells finished fabric),
- Job Work (where it processes fabric owned by the customer), and
- RMG, a menswear line launched through a new subsidiary in FY26.
Under job work, the customer supplies the material, so cost looks low and margin looks high on a small profit. Under manufacturing, Sonaselection buys the material itself, which lifts revenue and cost per metre together and compresses the percentage margin.
Unit Economics (per Metre Processed)
- Realisation per metre nearly tripled, from ₹25.03 in FY24 to ₹75.81 in FY26, as the company shifted from job-work fees to selling fabric it owns.
- Adj. EBITDA per metre more than doubled, from ₹6 to ₹12, even as Margins fell from 24% to 16%.
- Material Cost per metre rose extensively from ₹11 in FY24 to ₹45 in FY26.
The Financial Stuff
- Revenue from Operations grew from ₹121 Cr in FY24 to ₹517 Cr in FY26, driven by the shift into manufacturing and the capacity expansion at the Bhilwara plant.
- Profit After Tax grew from ₹13 Cr to ₹34 Cr, even as PAT Margin fell from 11% to 7%.
- Depreciation and Finance Costs both rose sharply as the company took on debt to fund its new capacity.
Operating Metrics
- Manufacturing’s share of revenue rose from 11% in FY24 to 81% in FY26, while Job Work fell from 89% to 17% in the same period. This is the central shift in the business: from being paid a processing fee, to owning the product and its margin.
- Total Production has shot up consistently from 48 million miles per annum (MMPA) in FY24 to 68 MMPA in FY26, a CAGR of ~19%
- Raw Material Sourcing: Yarn consumption jumped from ₹12 Cr in FY25 to ₹133 Cr in FY26, while greige fabric consumption fell. The company is buying yarn and having it converted to greige fabric through outsourced job-work, a step further back in the value chain than buying finished greige fabric directly.
Peer Comparison
- Scale is Sonaselection’s clearest gap against every peer. Its revenue is 32% of Vishal Fabrics, 16% of Sangam and 16% of Nitin Spinners.
- Sonaselection’s Return on Net Worth (RoNW) of 39% is the highest of the four, well above the 6% to 13% range of its peers.
At an upper band price of ₹99, with an FY26 EPS of ₹8.09, Sonaselection is trading at a P/E of 12.24x, while Vishal Fabrics trades at a P/E of 14.4x, Sangam trades at a P/E of 23.6x, and Nitin Spinners trades at 16.4x.
Key Risks
- Single manufacturing location: All production runs through one plant in Bhilwara, Rajasthan. A fire, equipment failure, labour dispute or local disruption at this site would stop output entirely, with no backup plant to absorb the loss.
- Negative operating cash flows: The company posted negative cash flow from operating activities of ₹-11 Cr in FY26 and ₹-14 Cr in FY25, as rising receivables and inventory absorbed cash faster than the business generated it.
- High leverage: D/E Ratio was 2.48x in FY26, and promoters have pledged personal property and given personal guarantees against certain company borrowings.
- Business model transition risk: The shift from job-work to manufacturing, and the new RMG line, exposes the company to new risks around inventory holding, quality assurance and building customer acceptance for products it did not sell three years ago.
Conclusion
Sonaselection is a small, single-plant textile processor that has grown fast by moving up the value chain, from job-work fees to manufacturing its own fabric. Profit has grown well, and leverage has actually eased compared to absolute debt. But against listed peers, it is the smallest by revenue, and operating cash flows are negative.
