Sanstar IPO to open on July 19: Check price band, issue size, strengths, weaknesses & more

Sanstar IPO (initial public offering) will open for subscription on Friday, July 19. The issue, which will conclude on July 23, has fixed a price band of ₹90 to ₹95 per share.

The ₹510.15 crore IPO of the plants-based speciality products maker comprises a fresh issue of 4.18 crore equity shares and an offer for sale (OFS) component of 1.19 crore shares.

The proceeds from the net issue will be used to expand the company's Dhule facility, repay debt, and for general corporate purposes.

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

Interested retail investors can place bids for at least one lot comprising 150 shares valued at ₹14,250.

Shares of Sanstar's IPO will be listed on the National Stock Exchange (NSE) and BSE. The tentative listing date has been fixed at July 26.

The registrar for Sanstar IPO is Link Intime India Private Ltd, and the book-running lead manager is Pantomath Capital Advisors Pvt Ltd.

Sanstar IPO: Key dates

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

About Sanstar

Sunstar Limited manufactures plant-based products and ingredient solutions for food, pet food, and other industrial applications.

Its product portfolio includes liquid glucose, maltodextrin powder, dried glucose solids, dextrose monohydrate, native maize starches and other items.

Sanstar Ltd's total income for the financial year ended March 31, 2024, declined 10.5% to ₹1,081.6 crore compared to ₹1,209.6 crore in the preceding fiscal year. The company's net profit for FY24 surged 59.5% to ₹66.77 crore from ₹41.81 crore in FY23.

Sanstar IPO: Strengths

• According to the company's red herring prospectus (RHP), Sanstar is the third largest manufacturer of maize-based speciality products and ingredient solutions in India. The business currently has an installed capacity of 3.63 lakh tonnes per annum.
• Sanstar's manufacturing facilities and presence in markets in 55 countries position it at an advantage to capture the requirements of diverse end-users across industries and regional markets.
• The company has a global presence, and its products are sold globally.

Sanstar IPO: Risks

• The company's maize-based speciality products and its ingredient solutions business have specific prerequisites in controlled conditions, such as specific temperature levels, cleanliness and accuracy; even a minor change in these controlled conditions can negatively impact Sanstar Ltd's business.
• The Maize-based speciality products industry has many players, and Sanstar Ltd faces strong competition. The entry of small players in the industry 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 such as mandis.

Sanstar promoters

Sanstar Ltd promoters include Gouthamchand Sohanlal Chowdhary, Sambhav Gautam Chowdhary, and Shreyans Gautam Chowdhary. Ahead of the issue, the promoters hold a 99.77% stake in the company. After the listing, their stake is likely to be reduced to 70.37%.