New Delhi: The initial public offering (IPO) of Rs 510 crore opened for subscription today and will close on July 23. It includes a fresh equity issue of Rs 397 crore and an offer for sale (OFS) of up to 1.19 crore shares.
Before the opening, the company secured Rs 153 crore from anchor investors, with participation from notable entities such as Bofa Securities, Societe Generale, and SBI General Insurance.
Analysts recommend subscribing to the IPO for potential listing gains, noting that while the valuation seems fully priced, the financials present a mixed outlook.
“Sanstar exhibits a mixed financial performance, with a recent dip in revenue but an increase in profitability. Nonetheless, fluctuations in raw material costs, susceptibility to global market volatility, fierce competition, and limited diversification beyond maize-based products are potential obstacles for future growth,” stated Swastika Investment, giving a ‘subscribe-listing gain’ rating.
The price band is set at Rs 90-95 per share, with a minimum bid of 150 shares per lot. The IPO allocation is divided into 50% for qualified institutional buyers (QIB), 35% for retail investors, and 15% for non-institutional investors.
The company intends to allocate the net proceeds from the fresh issue towards expanding its Dhule facility, repaying debts, and for other general corporate purposes.
Sanstar is a leading producer of plant-based speciality products and ingredient solutions in India, catering to food, animal nutrition, and various industrial sectors. Its portfolio includes liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native and modified maize starches, along with by-products such as germ, gluten, fibre, and enriched protein.
Frost & Sullivan ranks Sanstar as the third-largest manufacturer in India of maize-based speciality products and ingredient solutions.
