Introduction

Sanstar Limited, founded in 1982, is set to launch its Initial Public Offering (IPO) to raise ₹510.15 crores. The issue comprises a fresh issue of 4.18 crore shares aggregating to ₹397.10 crores and an offer for sale of 1.19 crore shares aggregating to ₹113.05 crores.

IPO Details

• IPO Date: July 19, 2024 to July 23, 2024

• Listing Date: July 26, 2024 (tentative)
• Face Value: ₹2 per share
• Price Band: ₹90 to ₹95 per share
• Lot Size: 150 Shares
• Total Issue Size: 53,700,000 shares (₹510.15 Cr)
• Fresh Issue: 41,800,000 shares (₹397.10 Cr)
• Offer for Sale: 11,900,000 shares (₹113.05 Cr)
• Issue Type: Book Built Issue IPO
• Listing At: BSE, NSE

IPO Schedule

• Opens: July 19, 2024
• Closes: July 23, 2024
• Basis of Allotment: July 24, 2024
• Initiation of Refunds: July 25, 2024
• Credit of Shares to Demat: July 25, 2024
• Listing Date: July 26, 2024

Issue Breakdown

• QIB Shares Offered: Not more than 50.00% of the Net offer
• Retail Shares Offered: Not less than 35.00% of the Offer
• NII (HNI) Shares Offered: Not less than 15.00% of the Offer

Sanstar IPO Lot Size

Investors can bid for a minimum of 150 shares and in multiples thereof. The table below depicts the minimum and maximum investment by retail investors and HNI in terms of shares and amount.

Promoter Holding

• Pre Issue: 99.77%
• Post Issue: 70.37%

About Sanstar Limited

Sanstar Limited manufactures specialty plant-based products and ingredient solutions for food, pet food, and other industrial applications. The company's products include liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native maize starches, modified maize starches, and by-products such as germ, gluten, fiber, and fortified proteins.

Key Features

• Founded: 1982
• Manufacturing Facilities: Dhule (Maharashtra) and Kutch (Gujarat)
• Installed Capacity: 3,63,000 tons per annum
• Employees: 271 (including 60 permanent employees)
• Export: Products exported to 49 countries

Financial Performance

Sanstar Limited's financial information indicates a revenue decrease by -10.58% and a profit after tax (PAT) rise by 59.71% between the fiscal years ending March 31, 2024, and March 31, 2023.

Key Performance Indicators (KPI)

• Market Capitalization: ₹1731.32 Cr (as of March 31, 2024)
• ROE: 30.92%
• ROCE: 24.43%
• Debt/Equity: 0.5
• RoNW: 30.92%
• P/BV: 6.18
• PAT Margin (%): 6.17%
• EPS (Pre IPO): ₹4.75
• EPS (Post IPO): ₹3.66
• P/E (Pre IPO): 19.98
• P/E (Post IPO): 25.93

Objects of the Issue

The Net Proceeds from the Fresh Issue will be utilized for:

1. Funding the capital expenditure requirement for the expansion of the Dhule Facility
2. Repayment and/or pre-payment, in part or full, of certain borrowings
3. General Corporate Purposes

Conclusion

Sanstar Limited is one of India's major manufacturers of specialty plant-based products and ingredients. With a strong market presence both domestically and internationally, the company is poised for growth. Investors may consider investing in the IPO, keeping in mind the financial performance and future growth prospects.