Sanstar IPO Gains Momentum on Day 2: Check Subscription, GMP Price, and Investor Details

The IPO of Sanstar Ltd has gained significant traction on the second day of its bidding process. The offering, which closes tomorrow, has been subscribed over nine times, with strong demand coming from non-institutional investors.

Subscription Details

• The non-institutional investors’ category was the most subscribed, at 21 times.
• Retail investors’ category was subscribed 9.16 times.
• The qualified institutional buyers (QIB) category lagged with only 13% bids.

Price Band and Lot Size

• Sanstar has set a price band of Rs 90-95 per share.
• Investors can bid for a minimum of 150 shares in one lot.
• The IPO allocation is divided as follows: 50% for QIB, 35% for retail investors, and 15% for non-institutional investors.

Grey Market Premium (GMP)

• Sanstar shares are trading at a GMP of Rs 40 in the unlisted market, indicating a 42% premium over the issue price.

Analyst Review

• Analysts recommend subscribing to the IPO for potential listing gains, noting that the company’s financial performance is mixed but valuations seem reasonable.
• Swastika Investmart gave a ‘subscribe-listing gain’ rating but highlighted challenges such as fluctuating raw material prices, global market volatility, and competition.

Use of Proceeds

• Sanstar plans to use the funds from the IPO to expand its Dhule facility, repay debt, and for general corporate purposes.

Company Background

• Sanstar is a leading manufacturer of plant-based specialty products and ingredient solutions in India, catering to the food, animal nutrition, and industrial sectors.
• The company produces items like liquid glucose, maltodextrin powder, dextrose monohydrate, native and modified maize starches, and co-products like germs, gluten, fiber, and enriched protein.
• According to Frost & Sullivan, Sanstar is the third-largest producer of maize-based specialty products in India, with a capacity of 3,63,000 tons per year.

Financial Highlights

• In FY24, Sanstar’s export revenue was Rs 394.44 crore, making up 35.53% of its total revenue.
• The company exports to 49 countries across Asia, Africa, the Middle East, the Americas, Europe, and Oceania.
• Sanstar’s revenue has grown at a compound annual growth rate (CAGR) of 45.46%, from Rs 504 crore in FY22 to Rs 1,067 crore in FY24.
• Profit after tax grew at a CAGR of 104.79%, from Rs 15.9 crore to Rs 66.7 crore in the same period.

Pantomath Capital Advisors is the lead manager for the issue, and Link Intime India is the registrar.