Sanstar to Launch Maiden Public Issue on July 19

15 Jul 2024 , 10:00 AM

Sanstar, a leading manufacturer of specialty products and ingredient solutions, is set to launch its initial public offering (IPO) on July 19, with a price band of ₹90-95 per share.

IPO Details

The company aims to raise ₹510.15 Crore through the IPO, which includes the issuance of 5.37 Crore equity shares at the upper price band. The IPO comprises a fresh issue of 4.18 Crore equity shares, valued at ₹397.1 Crore, and an offer-for-sale (OFS) of 1.19 Crore shares worth ₹113.05 Crore by the promoters.

Promoter Share Sales

• Rani Gouthamchand Chowdhary: Selling 38 lakh equity shares via OFS.
• Richa Sambhav Chowdhary and Samiksha Shreyans Chowdhary: Each selling 33 lakh shares via OFS.
• Gouthamchand Sohanlal Chowdhary, Sambhav Gautam Chowdhary, and Shreyans Gautam Chowdhary: Each offloading 5 lakh shares.

Issue Allocation

• Qualified Institutional Buyers (QIB): 50% of the issue size.
• Retail Investors: 35% of the issue size.
• Non-Institutional Investors (High Networth Individuals): 15% of the issue size.

Additionally, ₹153 Crore worth of shares from the QIB portion have been set aside for the anchor book, which will open for a day on July 18. The public issue will close on July 23.

Company Overview

Sanstar is a prominent manufacturer of plant-based specialty products and ingredient solutions in India, serving sectors like food, animal nutrition, and industrial applications. The company operates two manufacturing facilities located in Dhule, Maharashtra, and Kutch, Gujarat.

Product Range Includes:

• Liquid glucose
• Dried glucose solids
• Maltodextrin powder
• Dextrose monohydrate
• Native maize starches
• Modified maize starches
• Co-products such as germs, gluten, fiber, and enriched protein

Competitors and Financials

Sanstar competes with companies like Gujarat Ambuja Exports, Gulshan Polyols, and Sukhjit Starch & Chemicals. The company plans to use ₹181.6 Crore from the net fresh issue proceeds to expand its Dhule facility. Another ₹100 Crore will be allocated to repay debts, which amounted to ₹164.23 Crore as of May 24, 2024. The remaining funds will be used for general corporate purposes.

For the fiscal year ending March FY24, Sanstar reported a 60% growth in net profit, reaching ₹66.8 Crore compared to ₹41.8 Crore in the previous year, despite a decrease in revenue. Revenue from operations fell by 11.4% to ₹1,067.3 Crore from ₹1,205 Crore the previous year. EBITDA grew by 35.5% to ₹98.1 Crore, with a margin expansion of 319 basis points to 9.2%.

IPO Timeline and Management

The basis of allotment for IPO shares will be finalized by July 24, and the equity shares will be credited to the demat accounts of eligible investors by July 25. Trading on the BSE and NSE will commence on July 26.

Pantomath Capital Advisors is the sole book-running lead manager for the issue, and Link Intime India is the registrar to the offer.