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Introduction
Sanstar Limited, a company specialising in specialty products and ingredient solutions, has announced its plans to debut on the stock market with an initial public offering (IPO) on July 19. The anticipated Sanstar share price or the price range for its shares is Rs 90-95 per share, reflecting the company’s optimistic growth prospects.
The company aims to raise Rs 510.15 crore by selling 5.37 crore equity shares at the upper end of the price band. This IPO comprises a fresh issue of 4.18 crore equity shares valued at Rs 397.1 crore by the company and an offer-for-sale (OFS) of 1.19 crore shares worth Rs 113.05 crore by the promoters.
| Particulars | Remarks |
| IPO Date | July 19, 2024 to July 23, 2024 |
| Face Value | Rs 2 per share |
| Price Band | Rs 90 to Rs 95 per share |
| Lot Size | 150 Shares |
| Total Issue Size | 53,700,000 shares |
| (aggregating up to Rs 510.15 Cr) | |
| Fresh Issue (aggregating up to Rs 397.10 Cr) | 41,800,000 shares |
| Offer for Sale (aggregating up to Rs 113.05 Cr) | 11,900,000 shares |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| Shareholding pre-issue | 14,04,44,250 |
| Shareholding post issue | 18,22,44,250 |
IPO Details
Rani Gouthamchand Chowdhary plans through an offer for sale (OFS) to sell 38 lakh equity shares, while Richa Sambhav Chowdhary and Samiksha Shreyans Chowdhary will offload 33 lakh shares each via OFS. Additionally, Gouthamchand Sohanlal Chowdhary, Sambhav Gautam Chowdhary, and Shreyans Gautam Chowdhary, who are among the selling shareholders/prompters, will collectively sell 15 lakh shares through the offer-for-sale.
Sanstar limited IPO Promoter Holding
| Share Holding Pre-Issue | 99.77% |
| Share Holding Post-Issue | 70.37% |
Investors’ Holdings
Sanstar, headquartered in Ahmedabad, has tailored its IPO with a 50% allocation reserved for qualified institutional buyers (QIBs), 35% for retail investors, and the remaining 15% for non-institutional investors (high-net-worth individuals). The company’s strategic allocation aims to appeal to diverse investors.
| Investor Category | Shares Offered |
| 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 |
The allocation for the Sanstar IPO will be finalised on Wednesday, July 24, 2024. The Sanstar IPO will be listed on the BSE and NSE, tentatively on Friday, July 26, 2024.
Lots size’s Information for different Investors
The smallest lot size for an application is 150 shares. For retail investors, the minimum investment required is Rs 14,250. The minimum lot size investment for sNII is 15 lots (2,250 shares), totalling Rs 2,13,750; for bNII, it is 71 lots (10,650 shares), totalling Rs 10,11,750.
| Application | Lots | Shares | Amount |
| Retail (Min) | 1 | 150 | 14,250 |
| Retail (Max) | 14 | 2100 | 1,99,500 |
| S-HNI (Min) | 15 | 2,250 | 2,13,750 |
| S-HNI (Max) | 70 | 10,500 | 9,97,500 |
| B-HNI (Min) | 71 | 10,650 | 10,11,750 |
Anchor bid (details)
The Sanstar IPO has raised Rs 153.05 crore from anchor investors. The Sanstar IPO’s anchor bid date is July 18, 2024.
| Bid Date | July 18, 2024 |
| Shares Offered | 1,61,10,000 |
| Anchor Portion Size (In Crores) | 153.05 |
| Anchor lock-in period end date for 50% shares (30 Days) | August 23, 2024 |
| Anchor lock-in period end date for remaining shares (90 Days) | October 22, 2024 |
Allotment details
| Sanstar IPO Opening Date | Friday, July 19, 2024 |
| Sanstar IPO Closing Date | Tuesday, July 23, 2024 |
| Basis of Allotment | Wednesday, July 24, 2024 |
| Initiation of Refunds | Thursday, July 25, 2024 |
| Credit of Shares to Demat | Thursday, July 25, 2024 |
| Listing Date | Friday, July 26, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on July 23, 2024 |
Sanstar Company Details (Background)
Sanstar Limited was established in 1982 and is based in India. They specialize in manufacturing plant-based products and ingredient solutions for food, pet food, and other industrial applications.
Their product range includes liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native maize starches, modified maize starches, as well as by-products such as germ, gluten, fiber, and fortified proteins.
Sanstar limited is a major manufacturer of plant-based specialty products and ingredient solutions in India with an installed capacity of 1,100 metric tons per day. Sanstar’s products serve various industries, including food, animal nutrition, and other industrial applications.
Their unique selling points lie in our ability to perform complex, multi-step value addition and manufacturing processes. Sanstar limited is the India’s third largest manufacturer of maize-based specialty products and ingredient solutions, and our products are produced at large-volume, state-of-the-art manufacturing facilities in Maharashtra and Gujarat.
Financials of the company
The main financials of the company are stated below (Amount in Rs crores).
| Period Ended | 31-Mar-24 | 31-Mar-23 | 31-Mar-22 |
| Assets | 527.57 | 368.35 | 207.45 |
| Revenue | 1,081.68 | 1,209.67 | 504.77 |
| Profit After Tax | 66.77 | 41.81 | 15.92 |
| Net Worth | 215.91 | 149.28 | 48.97 |
| Reserves and Surplus | 225.18 | 158.41 | 55.69 |
| Total Borrowing | 127.64 | 111.7 | 85.22 |
Key Performance Indicators and their values
| Key Performance Indicators (KPI) | Values |
| Return on equity (ROE) | 30.92% |
| Return on capital employed (ROCE) | 24.43% |
| Debt/Equity | 0.5 |
| Return on net worth (RoNW) | 30.92% |
| Price to book-value ratio (P/BV) | 6.18 |
| Profit after tax (PAT) Margin (%) | 6.17 |
Objectives of the Issue
As per the Sanstar IPO Red Herring Prospectus (RHP), the funds raised from the Fresh Issue will be utilised as follows:
- The company plans to allocate funds to meet the capital expenditure requirements for expanding our Dhule Facility. This expansion will enable the company to enhance its production and overall operational capabilities.
- A portion of the proceeds will be dedicated to the partial or full repayment of certain borrowings availed by our Company. This strategic move will significantly reduce our debt burden, thereby strengthening our financial position and reassuring our investors about its sound financial management.
- The remaining funds will be allocated for general corporate purposes, which may include working capital needs, business development initiatives, and other operational requirements.
Moreover, the listing of the Equity Shares on the Stock Exchanges is expected to yield significant benefits. It will not only increase the company’s visibility and credibility in the market but also enhance its brand name and image among its existing and potential customers, aligning with its growth strategy.
It’s worth noting that our Memorandum of Association (MoA) empowers them to undertake the existing activities and the specific activities for which the funds are being raised through the Offer. They affirm that their current operations align with the object clause of their MoA.
Sanstar IPO Grey market premium (GMP)
The current Grey Market Premium (GMP) for Sanstar IPO is Rs 50, as of the latest update on July 15th, 2024, at 09:22 AM. Considering the price band of 95.00, the estimated listing price for Sanstar IPO is expected to be Rs 145 (price cap + today’s GMP), indicating a potential gain/loss percentage per share of 52.63%.
Based on the past 4 sessions of grey market activities, today’s assessment indicates a positive trend with expectations of a robust listing. The GMP has fluctuated between a low of Rs 0 and a high of Rs 50. We strongly encourage you to stay informed about the daily price trend of Sanstar IPO GMP, alongside the projected listing price, to make informed investment decisions.
Frequently Asked Questions (FAQs)
Who is the Lead Manager or the Merchant Banker of the Sanstar IPO?
Pantomath Capital Advisors Private Limited is the Merchant Banker of the issue.
When will Sanstar IPO open for different types of Investors?
For retail, QIB, and NII investors the IPO is set to open on July 19, 2024.
When is the allotment of shares expected from Sanstar IPO?
The allotment of Sanstar’s IPO shares is tentatively scheduled for July 24, 2024.
Who’s the Registrar of the Sanstar IPO?
The Registrar to the offer is Linkintime India Private Limited.
Who are the promoters for Sanstar Limited as per the Red Herring Prospectus?
The promoters of the company include – Mr. Gouthamchand Sohanlal Chowdhary, Mr. Sambhav Gautam Chowdhary, and Mr. Shreyans Gautam Chowdhary.
Where will the proceeds from the Offer from Sale (OFS) go?
The proceeds from the offer for sale (OFS) will be given to the selling shareholders.
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