Sanstar Limited IPO: Public Issue To Go Live On July 19, Price Band Set At Rs 90-95/Sh; Check Key Dates

Sanstar Limited's upcoming IPO is capturing the attention of investors. With the IPO price band set between Rs 90 to Rs 95 per equity share, Sanstar's initial public offering is poised to make waves in the financial market.

Key Details of the Sanstar IPO

The Sanstar Limited IPO is scheduled to open for subscription on Friday, July 19, and will close on Tuesday, July 23. Anchor investors can look forward to the allocation of shares on Thursday, July 18. The price band of Rs 90 to Rs 95 translates to a floor price that is 45 times the face value of Rs 2 per equity share and a cap price that is 47.50 times the face value. The minimum lot size for the IPO is 150 equity shares, with subsequent purchases in multiples of 150 shares.

Allocation and Reservation

The allocation strategy for the Sanstar IPO is designed to ensure a balanced distribution among different types of investors. Up to 50% of the shares are reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and 35% for retail investors. This equitable distribution aims to cater to a diverse investor base.

Timelines and Listing

The basis of allotment for the Sanstar IPO will be finalized on Wednesday, July 24. Investors can expect refunds to be initiated on Thursday, July 25, with shares being credited to their demat accounts on the same day. Sanstar shares are set to be listed on the BSE and NSE on Friday, July 26.

About Sanstar Limited

Sanstar Limited, headquartered in Ahmedabad, is a player in the food and industrial products sector. The company offers a wide range of products, including dried glucose solids, liquid glucose, maltodextrin, dextrose monohydrate, and native and modified starches derived from maize. Additionally, Sanstar produces co-products such as fiber, gluten, germs, and maize steep liquor.

These products enhance the flavour, texture, and nutritional value of food items and are used in various culinary applications, including baked goods, confections, pasta, soups, ketchup, sauces, creams, and desserts. They also serve as ingredients, thickening agents, stabilizers, sweeteners, and emulsifiers. Beyond the food industry, Sanstar supplies industrial products that function as disintegrants, excipients, supplements, coating agents, binders, smoothing and flattening agents, and finishing agents. The company also offers animal nutrition products.

Sanstar operates two production plants located in Dhule, Maharashtra, and Kutch, Gujarat, covering a combined area of 10.68 million square feet, or over 245 acres. The company has a strong presence in India, supplying products to 22 states, and has established a foothold in 49 countries across Asia, Africa, the Middle East, the Americas, Europe, and Oceania.

Financial Performance and Peer Comparison

Sanstar's financial growth has been impressive. According to the company's restated consolidated financial statements, revenue from operations grew at a compound annual growth rate (CAGR) of 45.46%, rising from Rs 504.40 crore in fiscal 2022 to Rs 1,067.27 crore in fiscal 2024. Meanwhile, profit after tax increased at a CAGR of 104.79%, climbing from Rs 15.92 crore in fiscal 2022 to Rs 66.77 crore in fiscal 2024.

The company's listed peers include Gujarat Ambuja Exports Ltd (with a P/E of 18.65), Gulshan Polyols Ltd (with a P/E of 73.31), and Sukhjit Starch and Chemicals Ltd (with a P/E of 15.01). Sanstar's financial metrics indicate a strong performance relative to its competitors.

Sanstar aims to raise Rs 510.15 crore through its IPO. This includes an offer-for-sale (OFS) of 1.19 crore shares valued at Rs 113.05 crore by the promoters and a fresh issue of 4.18 crore equity shares valued at Rs 397.1 crore by the firm. Shareholders, including Richa Sambhav and Samiksha Shreyans Chowdhary, will each be selling 33 lakh shares via OFS, while Rani Gouthamchand Chowdhary will sell 38 lakh equity shares. Other selling shareholders among the promoters include Gouthamchand Sohanlal Chowdhary, Sambhav Gautam Chowdhary, and Shreyans Gautam Chowdhary, who will each offload 5 lakh shares.

The proceeds from the fresh issue will be utilized to finance the capital expenditure required to expand the Dhule facility, repay or prepay some of the company's borrowings, and support general corporate purposes. Pantomath Capital Advisors Private Ltd serves as the sole book-running lead manager for the IPO, with Link Intime India Private Ltd acting as the offer's registrar.