Sanstar IPO Day 1: Issue subscribed 4.1 times, NII portion booked 9.8x; check details

The initial public offer (IPO) of plant-based speciality goods company Sanstar Limited was fully subscribed on Day 1. The strong demand, led by non-institutional investors (NIIs) and retail investors, resulted in the IPO being booked 4.1 times on day 1, according to the National Stock Exchange (NSE).

The NIIs category was booked 9.85 times, while the retail portion saw 4.0 times subscription. The part reserved for qualified institutional buyers or QIBs was subscribed just 0.05 times.

Sanstar IPO, which is live from July 19 to July 23, has a fixed price band of ₹90 to ₹95 per equity share.

The ₹510-crore IPO is a mix of fresh issuance of 4.18 crore equity shares and an offer for sale (OFS) component of 1.19 crore shares by selling shareholders.

Before the IPO, the company raised ₹153 crore from anchor investors. Sanstar's diversified anchor book consists of global financial institutions, domestic mutual funds, large insurance and non-banking financial companies (NBFCs) treasuries, alternative investment funds (AIFs), and foreign portfolio institutions.

BOFA Securities, BOI Mutual Fund, Societe Generale, Trust Mutual Fund, Gagandeep Credit Capital, SBI General Insurance Company, Chhattisgarh Investment, SB Opportunities Fund, Negen Undiscovered Value Fund, Finavenue Capital Trust, Minerva Emerging Fund and Intuitive Alpha Fund were allocated shares in the anchor round.

The firm has allocated 1.61 crore shares to 13 funds at ₹95 apiece, which is the upper price band of the issue.

Half of the net issue is set aside for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs) and the remaining 35% for retail investors.

Sanstar shares will be listed on NSE and BSE. The tentative listing date has been fixed at July 26.

Link Intime India Private Ltd is the issue's registrar, and Pantomath Capital Advisors Pvt Ltd is the sole book-running lead manager.

Sanstar IPO: Timeline

• Bidding dates: July 19 to July 23
• Allotment finalisation: July 24
• Refund initiation: July 25
• Demat transfer: July 25
• Listing: July 26

About Sanstar

Sanstar is a leading plant-based speciality products manufacturer in India. Its products and ingredients add taste, nutrients, and texture and increase functionality to foods as ingredients, stabilisers, thickening agents, and sweeteners.

With two manufacturing plants at Dhule and Kutch, the company has an installed capacity of 1,100 tonnes daily. Sanstar exports its products to several countries across Asia, the Middle East, Africa, the Americas, Europe, and Oceania.

Sanstar IPO: Strengths

• Sanstar is the third largest manufacturer of maize-based speciality products and ingredient solutions in India, according to the company's red herring prospectus (RHP).
• Sanstar's manufacturing plants and presence in markets in 55 nations position it at an advantage to capture the requirements of diverse end-users across industries and regional markets.
• The company has worldwide presence, and its products are sold globally.

Sanstar IPO: Risks

• The firm's maize-based speciality products and its ingredient solutions business have specific prerequisites such as specific temperature levels, cleanliness and accuracy. Even a minor change in the controlled conditions can negatively impact Sanstar's business.
• The Maize-based speciality products industry has several players, and Sanstar faces strong competition. The entry of small players has led to pricing pressures in global markets.
• The company's key raw material is maize, and it is dependent on a limited number of suppliers who sell their produce in unorganised marketplaces like mandis.