Textile company Sitaram Denims India has filed draft papers with the Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO). 

The proposed issue will include a fresh issue of 2.64 crore equity shares and an offer for sale of 44.71 lakh shares by the company’s promoters. The company filed its draft red herring prospectus as it looks to raise capital for debt repayment, working capital requirements and business expansion.

A major portion of the money raised through the fresh issue is expected to be used to reduce the company’s borrowings. Sitaram Denims also plans to use part of the proceeds to meet its working capital needs and support future expansion.

Reducing debt could help lower the company’s interest costs and strengthen its financial position. Additional working capital may also support its day to day operations as the business expands.

The IPO will consist of both fresh shares and an offer for sale. Money raised through the fresh issue will go to the company, while proceeds from the offer for sale will go to the existing promoters selling their shares.

The final size of the IPO will depend on the number of shares offered and the issue price, which has not yet been announced.

Filing the draft papers is the first step towards a public listing. SEBI will review the documents before the company can proceed with the IPO.

The final terms of the IPO will be known after regulatory approvals and further announcements from the company.

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