Sanstar Limited IPO (Sanstar IPO) Review –
Sanstar Limited IPO (Sanstar IPO) is set to open from 19th July 2024 to 23rd July 2024. This article will analyze the financials , strengths and weaknesses of the Sanstar Limited IPO (Sanstar IPO). Keep scrolling below to read more!
Sanstar Limited IPO (Sanstar IPO) Overview –
Established in 1985,
Sanstar Limited is one of the major manufactures plant-based specialty products and ingredient solutions for food, animal nutrition and other industrial applications in India. The company’s product portfolio includes liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native maize starches, modified maize starches, and by-products such as germ, gluten, fiber and enriched proteins amongst others.
These products are used in:
- Food products as ingredients, thickening agents, stabilizers, sweeteners, emulsifiers, and additives (in baked goods, confectionery, pasta, soups, ketchup, sauces, creams and desserts);
- Animal food products as nutritional ingredients; and
- Other industrial products as disintegrants, excipients, supplements, coating agents, binders, smoothing and flattering agents, and finishing agents.
The company has two manufacturing facilities covering a total area of 10.68 million square feet (approx 245 acres) at Dhule in the state of Maharashtra and Kutch in the state of Gujarat. With an installed capacity of 3,63,000 tons per annum (1,100 tons per day), they are the third largest manufacturer of corn-based specialty products and ingredient solutions in India.
The company exports its products to companies in 49 countries including Asia, Africa, the Middle East, America, Europe and Oceania. The company also has a pan-India presence where its products are sold in 22 states.
As of March 31, 2024, the company employed 271 people (including 60 permanent employees) at its plants in Kutch and Dhule and at its headquarters.
Sanstar Limited IPO (Sanstar IPO) Synopsis-
Sanstar Limited IPO (Sanstar IPO) is set to be open from 19th July 2024 to 23rd July 2024, offering only fresh issue of 4.18 crore shares aggregating to Rs 397.10 crores and offer for sale(OFS) of 1.19 crore shares aggregatin to Rs 113.05 crores. This NSE,BSE IPO follows a Book Built Issue IPO.
The total issue size of this IPO amounts to Rs. 510.15 Crores. The company has allocated shares 35% to retail investors, 50% to institutional and 15% to non institutional investors.
| Particulars | Details |
| Opening Date | 19th July 2024 |
| Closing Date | 23rd July 2024 |
| Lot Size | 150 Shares |
| Face Value | Rs. 2 |
| IPO Size | Rs. 510.15 Cr |
| Fresh Issue | Rs. 397.10 Cr |
| IPO Price Range | Rs. 90 – 95 |
| Min. Investment | Rs. 14,250 |
| Offer for Sale (OFS) | Rs. 113.05 Cr |
| Employee Discount | N/A |
| Basis of Allotment | 24th July 2024 |
| Refunds | 25th July 2024 |
| Listing Date | 26th July 2024 |
| DRHP Draft Prospectus: | Click Here |
| RHP Draft Prospectus: | Click Here |
Sanstar Limited IPO (Sanstar IPO) Book Running Lead Managers –
- Pantomath Capital Advisors Private Limited
Sanstar Limited IPO (Sanstar IPO) Registrar to the offer –
The registrar for the Sanstar Limited IPO (Sanstar IPO) is Link Intime India Private limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.
The Objective Of The Issue –
The company proposes to utilize the Net Proceeds from the IPO towards the achievement of the following objects:
- Funding the capital expenditure requirement for the expansion of company’s Dhule Facility;
- Repayment and/or pre-payment, in part or full, of certain borrowings availed by the Company, and;
- General Corporate Purposes.
Key Performance Indicator –
The market capitalization of Sanstar Limited is Rs 1731.32 Cr.
KPI as of March 31, 2024.
| Earning Per Share (EPS): Post IPO | ₹3.66 per Equity Share |
| Price/Earning P/E Ratio: Post IPO | 25.93 |
| Return on Net Worth (RoNW): | 30.92% |
| PAT Margin(%) | 6.17% |
| Net Asset Value (NAV): | ₹22.17 per Equity Share |
Financial Status –
Sanstar Limited’s revenue decreased by -10.58% and profit after tax (PAT) rose by 59.71% between the financial year ending with March 31, 2024 and March 31, 2023.
| Particulars(in Rs. Crores) | FY 24 | FY 23 | FY 22 |
|---|---|---|---|
| Revenue From Operations | 1081.68 | 1209.67 | 504.77 |
| PAT | 66.77 | 41.81 | 15.92 |
| Net Worth | 215.91 | 149.28 | 48.97 |
| Total Assets | 527.57 | 368.35 | 207.45 |
| Total Borrowings | 127.64 | 111.70 | 85.22 |
Evaluation of P/E Ratio
The P/E Ratio of Sanstar Limited is 25.93.
Comparative Analysis with Listed Peers
The average P/E Ratio of the industry is N/A.
Peers of Sanstar Limited –
Sanstar Limited peer comparison with similar listed entities. (As on March 31, 2023)
| Company Name | EPS (Basic) | NAV (per share) (Rs) | P/E | RoNW (%) | P/BV | Financial statements |
|---|---|---|---|---|---|---|
| Sanstar Limited | 4.75 | 15.37 | 19.98 | 30.92 | 6.18 | Consolidated |
| Gujarat Ambuja Exports Ltd. | 7.54 | 60.37 | 18.65 | 12.49 | 2.33 | Consolidated |
| Gulshan Polyols Ltd. | 2.85 | 123.63 | 73.31 | 2.30 | 1.69 | Consolidated |
| Sukhjit Starch & Chemicals Ltd. | 31.98 | 321.75 | 15.01 | 9.94 | 1.49 | Consolidated |
Sanstar Limited IPO (Sanstar IPO) Strengths –
- Sanstar Limited has demonstrated impressive growth over Fiscal 2021-2023, indicating strong operational efficiency and market acceptance.
- The company operates two major facilities in Gujarat and Maharashtra enabling large-scale production and supply capabilities.
- Sanstar Limited exports to 49 countries across multiple continents showcasing its broad international presence and acceptance of its speciality products.
- The Dhule facility features state-of-the-art automation which enhances production efficiency and quality while minimizing costs and errors.
- Demand of plant based ingredients and speciality products is increasing globally.
Sanstar Limited IPO (Sanstar IPO) Weakness –
- Sanstar Limited lacks fixed contracts for maize procurement, its primary raw material, making it vulnerable to price fluctuations and supply disruptions.
- The company requires substantial working capital to purchase and store maize during its peak arrival season. Insufficient funds during this critical time could hinder operations.
- Ongoing litigation could adversely affect the company if resolved unfavorably.
- The recent amalgamation with Sanstar Bio-polymers and the acquisition of ECL could lead to integration challenges. Discrepancies in financial statements or operational hurdles post-merger may affect overall business performance.
- Company operates in a highly regulated and competitive industry.
Sanstar Limited IPO (Sanstar IPO) GMP Today –
IPO’s last GMP is ₹30, last updated Jul 22nd 2024. With the price band of 95.00, IPO’s estimated listing price is ₹125 (cap price + today’s GMP). The expected percentage gain/loss per share is 31.58%.
Note : The GMP prices shown here are only news related to the grey market. We do not trade/deal in grey market or subject to rates, nor do we recommend trading in grey market.
Conclusion –
Based on FY24 super earnings, the issue appears aggressively priced. Amidst rising demand for its products, the management is confident of improving the trends reported and its performance post expanded capacities. Well-informed investors may park moderate funds for the long term.
Hope the details presented in this blog will assist you in learning about the financial performance of the company. Before making an investment in the company’s upcoming initial public offering (IPO), thoroughly research the company, its finances, business prospects, and market trends.
Also, investors should consult their financial advisor, conduct further due diligence, analyze industry trends and the competitive landscape, and consider risk factors before making an investment decision.
For all such latest information on upcoming IPOs, keep visiting our website.
