Sanstar IPO: Everything You Need to Know

Sanstar’s Initial Public Offering (IPO) is scheduled to begin on July 19, 2024, and will be offered for bidding until July 23, 2024. This IPO is a significant financial market event, with the goal of raising big capital and providing investors with a one-of-a-kind opportunity to engage in one of India’s leading manufacturers of plant-based specialty products.

Details about the IPO

The IPO subscription period will be open from July 19 to July 23, 2024. The company has set a price range of Rs 90-95 per share, allowing investors to bid within it.

Financial Goals of the IPO

Sanstar expects to raise Rs 510.15 crore through this IPO. This figure includes a fresh issue of Rs 397.10 crore and an offer for sale (OFS) of up to 11,900,000 equity shares at Rs 2 each.

Key Shareholders and Their Share Sales

In the upcoming offer for sale (OFS), several major shareholders will be selling their shares. Rani Gouthamchand Chowdhary plans to sell 38 lakh shares, while both Richa Sambhav Chowdhary and Samiksha Shreyans Chowdhary will each sell 33 lakh shares. Additionally, Gouthamchand Sohanlal Chowdhary, Sambhav Gautam Chowdhary, and Shreyans Gautam Chowdhary will each be selling 5 lakh shares.

Investment Categories and Reservations

The IPO will allocate approximately 50% of the shares to Qualified Institutional Buyers (QIBs), 35% to retail investors, and 15% to non-institutional investors. An amount up to Rs 153 crore from the QIB portion will be reserved for the anchor investors. The anchor book will be open for one day on July 18.

Utilization of IPO Proceeds

Sanstar intends to spend Rs 181.6 crore from the net proceeds of the new offer to expand its Dhule factory. Another Rs 100 crore will be utilized to cover debts totaling Rs 164.23 crore as on May 24 this year. The remaining monies will be used for general corporate reasons.

Sanstar’s Business Overview

Sanstar is a leading provider of plant-based specialized products and ingredient solutions in India, serving the culinary, animal nutrition, and industrial markets. The company’s product offerings include liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native maize starches, modified maize starches, and co-products such as germs, gluten, fiber, and enhanced protein.

Product Range

Sanstar offers a diverse range of products:

• Liquid Glucose
• Dried Glucose Solids
• Maltodextrin Powder
• Dextrose Monohydrate
• Native Maize Starches
• Modified Maize Starches
• Co-products like Germs, Gluten, Fiber, and Enriched Protein

Production Capacity

According to Frost & Sullivan, Sanstar is India’s third-largest maker of maize-based specialized products and ingredient solutions, with an installed capacity of 3,63,000 tonnes per year (1,100 tonnes per day).

Export Market

Sanstar’s export income in Fiscal 2024 was Rs 394.44 crore, accounting for 35.53% of its total operating revenue. The company shipped its products to 49 countries in Asia, Africa, the Middle East, the Americas, Europe, and Oceania.

Financial Performance

Sanstar has demonstrated outstanding financial growth. Its operating revenue climbed at a compound annual growth rate (CAGR) of 45.46%, rising from Rs 5,044.02 million in Fiscal 2022 to Rs 10,672.71 million in Fiscal 2024. Additionally, its profit after tax increased at a CAGR of 104.79% from Rs 159.21 million in Fiscal 2022 to Rs 667.67 million in Fiscal 2024.

Management & Leadership

Sanstar’s leadership team is comprised of seasoned professionals that are dedicated to the company’s strategic goal and success. Their aggregate skills and strategic direction have been critical to Sanstar’s success and market position.

Risks and opportunities

Sanstar’s initial public offering, like any other investment, carries risks and opportunities. Market risks include shifts in demand and raw material pricing. However, Sanstar’s strong market position, diverse product portfolio, and rising worldwide footprint present considerable growth potential.

How to Subscribe

Subscribing to Sanstar’s IPO is straightforward. Here are the steps:

1. Open a Demat Account: If you do not already have one, create one with a brokerage business.
2. Link Your Bank Account: Make sure your bank account is linked to your demat account.
3. Choose a Lot Size: Determine the amount of shares you want to bid for within the price range.
4. Log in to your brokerage account, look for the Sanstar IPO, and then submit your offer.
5. Wait for allocation: Once the bidding time has ended, wait for the allocation status to be notified.

Conclusion

Sanstar’s IPO provides an exciting opportunity for investors to become a part of a thriving company with a strong market presence and solid financial performance. Sanstar will use the cash collected to expand its facilities, settle debts, and support general business goals, resulting in continued growth and development. As with any investment, it is critical to assess the risks and make an informed decision.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The OSTP Media)

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