Sonaselection IPO Price Band, Retail Quota & Financial Performance Analysis

Written by Jainam Resources

Last Updated on: September 23, 2026

Summary: Sonaselection India Limited is raising ₹141.57 crore at ₹94 to ₹99 per share, entirely as fresh capital with no offer for sale. Bidding runs from September 17 to September 21, 2026. The listing on BSE and NSE is set for September 24.

Key Highlights

• No promoter exit: All 1,43,00,000 shares are newly issued and there is no Offer for Sale. The company receives the issue proceeds after applicable issue expenses and other adjustments.
• Retail entry: One lot of 150 shares costs ₹14,850 at the cap price.
• Earnings: FY2026 revenue from operations was ₹5,169.49 million, with a profit after tax of ₹340.23 million.
• Main use of funds: ₹800 million repays bank borrowings.

Sonaselection India IPO at a Glance

Sonaselection India IPO is a fresh issue of equity shares, with no Offer for Sale (OFS) component. The issue is aimed at raising funds for debt repayment, machinery investment, and general corporate needs.

The absence of an offer for sale distinguishes this issue. Promoters Harshil Nuwal, Subhash Chandra Nuwal, Uma Nuwal, Deepank Bhandari, and Sona Polyspin Private Limited are selling no shares. Their holding dilutes through new equity rather than a sale. The anchor book was scheduled for September 16.

Promoter Shareholding Pattern

Sonaselection’s promoters are Harshil Nuwal, Subhash Chandra Nuwal, Uma Nuwal, Deepank Bhandari, and Sona Polyspin Private Limited.

Before the IPO, the promoter group held 36,666,975 shares, representing 86.21% of the pre-issue paid-up equity share capital on a fully diluted basis. The RHP had not yet populated the final post-issue percentages because those figures were to be updated in the Prospectus.

The RHP states that 20% of the fully diluted post-issue paid-up capital held by promoters will constitute the minimum promoter contribution and remain locked in for 18 months from allotment. Promoter holdings above this minimum are subject to a six-month lock-in, as prescribed.

Anchor Investor Allocation

The company may allocate up to 60% of the QIB portion to anchor investors. Within the anchor portion, 40% is reserved in the prescribed manner, including allocations for domestic mutual funds and life insurance companies and pension funds, subject to valid bids.

The RHP defines an anchor investor as a QIB bidding for at least ₹10 crore.

Subscription Schedule & Important Dates

Price Band, Market Lot & Retail Quota

The floor price is ₹94, and the cap price is ₹99. Retail bidders may apply at the cut-off price rather than naming a figure within the band.

• Retail minimum: 150 shares at ₹14,850.
• Retail maximum: 13 lots, within the ₹200,000 ceiling.
• Applications: In multiples of 150 shares.

The category reservation structure follows the RHP framework:

• QIB: At most 50% of the issue.
• NII: At least 15%.
• Retail: At least 35%.
• Anchor investors: Up to 60% of the QIB portion.
• Cut-off bidding: Available to eligible retail bidders.

The issue is made under Regulation 6(1) of the SEBI ICDR Regulations. Qualified institutional buyers receive not more than 50%, non-institutional bidders not less than 15%, and retail bidders not less than 35%. No employee reservation portion is disclosed.

Company Overview & Business Model

Incorporated in 2022, Sonaselection India Limited runs a manufacturing facility at Hamirgarh, Bhilwara, in Rajasthan. It manufactures and processes cotton, cotton lycra, cotton blends, polyester-viscose and polyester-blend fabric for fashion and apparel buyers. Processing runs from bleaching and dyeing through finishing, grading, and packing, with yarn and greige fabric as primary inputs.

The revenue mix has changed sharply over three years, which is the most significant operational development in the prospectus:

The company has moved from job-work processing to selling its fabric. That shift explains the revenue expansion and also the margin compression, since owning the product means carrying raw material cost and inventory risk, a job-work processor avoids.

Financial Performance & Growth Analysis

Revenue grew 63.6% in FY2026, and profit after tax grew 83.3%. Return on capital employed improved each year to 19.69%, and leverage fell from 3.72 times to 2.48 times.

On the other hand, EBITDA margin has dropped for two consecutive years, from 23.55% to 16.40%, tracking the shift toward goods sales. Working capital has stretched as well, with inventory days rising from 115 to 150 and debtor days from 48 to 61, taking working capital days to 134.

Basic EPS of ₹8.09 places the cap price at 12.24 times earnings on a pre-issue share count. The post-issue multiple will be higher.

Balance Sheet and Key Ratios

The company’s FY2026 basic EPS was ₹8.09, compared with ₹4.57 in FY2025 and ₹3.25 in FY2024. Return on net worth stood at 39.05% in FY2026.

Other reported indicators include:

• ROCE: 19.69%
• Debt-equity ratio: 2.48 times
• Debt service coverage ratio: 1.70 times
• NAV per share: ₹24.78
• Inventory days: 150
• Working capital days: 134

The debt-equity ratio has declined from 3.72 times in FY2024 to 2.48 times in FY2026. However, borrowings remained material. As of March 31, 2026, total borrowings were ₹258.24 crore against total equity of ₹104.16 crore.

Valuation and Peer Comparison

The RHP gives a weighted average basic EPS of ₹6.11 for FY2024–FY2026. It also reports a weighted average RoNW of 37.63%.

The peer set and industry comparison are used on the RHP’s basis for issue price. However, the final P/E calculation depends on the issue price and therefore should be considered using the final ₹94–₹99 price band rather than the placeholders present in the September 7 RHP.

Objectives of the Public Issue

• Repayment of borrowings: ₹800.00 million toward full or partial prepayment of bank loans.
• Capital expenditure: ₹506.11 million for plant and machinery at the Bhilwara facility.
• General corporate purposes: Capped at 25% of gross proceeds.

Debt repayment takes the larger share and is expected to reduce the company’s borrowings. The impact on future profit will depend on interest costs, operating performance and other financial factors. With a debt-equity ratio of 2.48 times, this deployment directly addresses the balance sheet, and the resulting interest savings are expected to support profits in Fiscal 2027.

Investment Analysis & Review

Strengths

• The entire issue is fresh capital, so proceeds fund the business rather than selling shareholders.
• Return on net worth was held near or above 34% in all three reported years.
• Leverage has fallen for two years running, with further repayment funded by the issue.
• Integrated processing covers the route from greige fabric to finished, packed output.

Risks

• Operations depend on a single facility in Bhilwara.
• EBITDA margin contracted by more than seven percentage points across two years.
• Working capital days rose from 104 to 134, tying up more cash as the business grew.
• Incorporated in 2022, the company has a short operating record.
• Cotton and yarn prices move with commodity cycles and feed directly into input costs.

Assessment: Pricing is undemanding at roughly 12 times pre-issue earnings, and the balance sheet improves through debt repayment. The counterweight is a business model still in transition, with margins narrowing as the goods’ share of revenue rises. A longer view depends on margins stabilizing once that shift completes.

Note: Informational purposes only; not investment advice. Figures derive from the Red Herring Prospectus dated September 7, 2026, and issue data as of September 18, 2026. Listing dates are tentative.

Source of information: https://www.sebi.gov.in/sebi_data/commondocs/sep-2026/Sonaselection%20India%20Limited%20%20-%20AP_p.pdf