Sanstar Limited IPO: GMP Soars on Strong Day 1 Subscription — Apply Now or Wait?

Sanstar Limited’s IPO launched on 19th July 2024 and will be open until 23rd July 2024. The company has set the IPO price between ₹90 and ₹95 per share and aims to raise ₹510.15 crore. Of this amount, ₹397.10 crore will come from new shares, while ₹113.05 crore is through an Offer for Sale (OFS). The IPO will be listed on both BSE and NSE.

IPO Subscription Status

On the first day, the IPO was oversubscribed 4.16 times overall. The retail portion was subscribed 4.07 times, the Non-Institutional Investors (NII) segment was 9.85 times oversubscribed, and the Qualified Institutional Buyers (QIB) portion was only 0.05 times subscribed.

Grey Market Premium (GMP)

The GMP for Sanstar Limited IPO is ₹46 today, up from ₹42 on Friday. This increase is notable given the weak market conditions. The rise in GMP is attributed to the strong subscription status on the first day of bidding. With two more days left for bidding, the small size of the IPO is expected to continue attracting interest.

IPO Review

Master Capital Service recommends subscribing to the IPO, noting that Sanstar plans to use the funds to pay off debt, expand capacity, and drive growth. The company’s current capacity is almost full, and the planned expansion will significantly increase it. The IPO valuation is comparable to listed peers, making it a good long-term investment.

BP Equities also recommends subscribing, saying the issue is fairly valued at a P/E ratio of 20.0x based on FY24 earnings. Other brokerages like Adroit Financial Services, Arihant Capital, and Canara Bank Securities also advise subscribing to the IPO.

Key Dates:

• IPO Bidding Ends: 23rd July 2024
• Allotment Date: 24th July 2024
• Listing Date: 26th July 2024