Sanstar Ltd IPO: Review, Valuation, Opening Date & Today GMP

Sanstar Limited IPO - Complete Overview

Sanstar Limited IPO by Sanstar Limited was established in 1982 and is an Indian company that produces unique plant-based goods and ingredient solutions for pet food, cuisine, and other industrial uses. Liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native and modified maize starches, and by-products such as germ, gluten, fiber, and fortified proteins are among the products offered by the company.

These goods are used in:

Food products in baked goods, confections, pasta, soups, ketchup, sauces, creams, and desserts as ingredients, thickeners, stabilizers, sweeteners, emulsifiers, and additions;

Products used in pet food as nutritional components; and

Products used in other industries as coating agents, binders, supplements, disintegrants, excipients, smoothing and flattering agents, and refining agents.

Estimated at USD 2,265.1 million in 2023, the global glucose market is projected to grow at a compound annual growth rate (CAGR) of 4.14% from 2023 to 2029, reaching USD 2,888.9 million by that time. The market, measured in volume terms, is expected to reach 4.7 million MT in 2023 and increase at a CAGR of 3.79% to 5.9 million MT.

The world's share of India's maize production increased slightly from 2.6% in FY2020 to 3.3% in FY2023, largely due to rising output from South America. In FY2024, it is projected to decline a little to 2.9%. Over the next five years, India may increase its maize production from approximately 37.5 million tons to 50 million tons by raising the yield to 5 tons/ha.

The company maintains two manufacturing sites, one in Kutch, Gujarat, and one in Dhule, Maharashtra, totaling 10.68 million square feet, or over 245 acres. Installed capacity of 3,63,000 tons annually (1,100 tons per day), the enterprise ranks seventh in India for the production of specialty products and additives made from corn. The business exports its goods to businesses in 49 nations, including those in America, Europe, Asia, Africa, the Middle East, and Oceania. Additionally, the corporation operates throughout India, selling its goods in 22 states.

As of March 31, 2024, the company has 271 workers at its headquarters, Kutch and Dhule operations, including 60 permanent employees.

Dear readers, we are pleased to provide details about the approaching IPO. The company plans to launch its IPO on July 19, 2024. Let's take a closer look at the IPO's offerings below.

 

 

Sanstar Limited IPO Overview

Sanstar IPO is a Mainboard book-built issue of Rs.510.15 crore comprising a Fresh Issue of 4.18 crore Shares (amounting to Rs.397.10 crore) and an offer for sale of 1.19 crore Shares totaling Rs.113.05 crore out of which 35% is allocated to retail investors, 50% to institutional investors, 15% to non-institutional-investors.

The IPO will be available to investors on July 19, 2024, and conclude on July 23, 2024. The anticipated listing date for the IPO is Friday, July 26, 2024, and will be held on the NSE and BSE. The price range of each Share is Rs.90 to Rs.95.

If you want to apply for the IPO, Click Here to Open a Demat Account.

 

Company Financial

The company's revenue decreased by 10.58%, while profit after tax (PAT) increased by 59.71% during the financial years ending March 31, 2024, and March 31, 2023. 

Below is the synopsis of the company's financial data for the financial year ending March 31, 2024.

• The total revenue of the company is Rs.11101.04 million.

• The net worth of the company is Rs.2,159.12 million.

• The company's EBITDA is Rs.981.41 million.

• The total assets of the company are Rs.5275.69 million.
  
  

(Amount in million)

Period	31 Mar 2024	31 Mar 2023	31 Mar 2022
Total Assets	5275.69	3683.51	2074.53
Total Revenue	11101.04	12605.44	5150.43
PAT	667.67	418.05	159.21
Net worth	2,159.12	1,492.81	489.67
Reserve & Surplus	2256. 73	1590.42	557. 14
Borrowing	1,276.36	1,117.00	852.24

 

 

Revenue Bifurcation

Below is the revenue breakdown for various activities:

(Amount in million)

Net Cash Flow In Multiple Activities	FY 2024	FY 2023	FY 2022
Net Cash Flow Operating Activities	285.97	-60.17	297.14
Net Cash Flow Financing Activities	51.98	830.35	-250.28
Net Cash Flow Investing Activities	-368.90	-713.88	-44.99

Gross Revenue Breakdown From Various Industry Segments

Geography-wise Revenue Breakdown

Breakdown Of Revenue From Operations

 

The Objective Of The Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• Financing the necessary capital expenditures for the Dhule Facility's expansion;

• Repayment and/or prepayment, in full or in part, of certain loans that the business has taken out;

• General business objectives
  
  

Peers of Sanstar Limited

(Figures as of March 31, 2024)

Company Name	Face Value (Rs.)	EPS (Rs.)	P/E (x)
Gujarat Ambuja Exports Ltd.	1	7.54	18.65
Gulshan Polyols Limited	1	2.85	73.31
Sukhjit Starch and Chemicals Limited	10	31.98	15.01

 

 

Evaluation

The price of this IPO is Rs.90 to Rs.95 for each Share.

Evaluation Of P/E Ratio

Considering the Fiscal 2024, with EPS of Rs.4.75 from the last year, the resulting P/E ratio is 20x.

Considering the weighted EPS of Rs.3.55 for the last three years, the P/E ratio is 26.76x.

Comparative Analysis With Listed Peers

The average P/E Ratio of the industry is 35.66x.

Particulars	P/E Ratio
Highest	73.31
Lowest	15.01
Average	35.66

In simple words, the P/E ratio of Sanstar Limited-IPO (20x and 26.76x) when compared with the industry’s average P/E of 35.66x, has an undervaluation. Hence the price of the Share seems fairly priced for the investors when considered based on the average P/E ratio of the industry.

IPO's Strengths

• One of the biggest producers of specialty goods and ingredient solutions based on maize in India, with a wide range of products, they have increased its revenue and profit at a compound annual growth rate (CAGR) of 45% and 105% for the fiscal years 2022–2024.

• Player in specialty goods and ingredient solutions, serving a variety of market niches and well-positioned to profit from major industrial developments

• Worldwide reach in a market with significant barriers to entry

• Their profit after tax grew at a CAGR of 104.79% from Rs.159.21 million in Fiscal 2022 to Rs.667.67 million in Fiscal 2024, while its revenue from operations increased at a CAGR of 45.46% from Rs.5,044.02 million in Fiscal 2022 to Rs.10,672.71 million in Fiscal 2024. The value of its exports increased at a CAGR of 358.33% from Rs.187.77 million in Fiscal 2022 to Rs.3,944.38 million in Fiscal 2024. In Fiscal 2024, its exports accounted for 35.53% of the Gross Revenue from Operations.

• Broad, varied clientele with enduring connections

• Currently, it exports its goods to more than 49 nations in Europe, the Middle East, Africa, Asia, North America, and Central America. Historically, its top 5 export destinations by revenue have included Nations like Malaysia, Vietnam, Kenya, Indonesia, and the United Arab Emirates. As a percentage of Gross Revenue from Operations, its revenue from exports climbed to 35.53% in Fiscal 2024 from 3.65% in Fiscal 2022.

 

IPO’s Weaknesses

• A substantial amount of working capital is needed to purchase and store large amounts of maize, which is the main raw material needed for the production of the company's products, during the busiest time of the year for maize harvesting. Its operational outcomes and overall business may suffer if they are unable to raise the aforementioned working capital during the busiest time of the maize harvest.

• The company sells its goods to particular industries for particular purposes.  Any decrease in the need or demand for its products in these sectors could lead to a loss of business and have an impact on its financial situation and performance.

• Their planned strategies to finance the capital investment needed for the Dhule Facility expansion are vulnerable to unforeseen delays in execution, approvals, and cost overruns, all of which might harm its operations and company.

• The company's financial situation, operational outcomes, and business could all suffer from any halt or reduction in the production activities at its manufacturing facilities.

• The company exports its goods to several different countries worldwide. Its items may be subject to import taxes or limitations in the applicable regions. Furthermore, unfavorable changes in the value of foreign currencies, the absence of any financial advantages, or failure to meet relevant regulations might all negatively impact its operations and business.

• The production of "maize-based specialty products and ingredient solutions" necessitates carefully regulated conditions, including precise temperature controls, high standards of cleanliness, and power supply shortages. Any disruptions or power outages could harm its business and operational outcomes.

 

IPO GMP Today

Sanstar Limited IPO’s latest GMP is Rs.25.

Sanstar Limited IPO Timetable (Tentative)

The IPO is scheduled from July 19 to July 23, 2024, with allotment on July 24, refund initiation on July 25, and listing on July 26, 2024.

Events	Date
IPO Opening Date	July 19, 2024
IPO Closing Date	July 23, 2024
IPO Allotment Date	July 24, 2024
Refund initiation	July 25, 2024
IPO Listing Date	July 26, 2024

 

Sanstar Limited IPO Details 

The IPO with a face value of Rs.2 per Share is set to start on July 19, close on 23 July, and offer a total issue size of 53,700,000 shares (aggregating up to Rs.510.15 Cr) comprising a fresh issue size of 41,800,000 Shares of Rs.397.10 Cr. and offer for sale of 1.19 crore Shares totaling Rs.113.05 crore.

IPO Opening & Closing Date	July 19, 2024 to July 23, 2024
Face Value	Rs.2 per Share
Issue Size	53,700,000 Shares (aggregating up to Rs.510.15 Cr)
Offer for Sale	1.19 crore Shares totaling Rs.113.05 crore.
Fresh Issue	41,800,000 Shares of Rs.397.10 Cr
Listing at	NSE, BSE
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Private Ltd

 

 

Sanstar Limited IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (150 Shares) amounting to Rs.14250 and in multiples thereof and 14 Lots (2100 Shares) amounting to Rs.199500 respectively, while for HNI investors, the minimum Lot is 15 (2250 Shares) amounting to Rs.213,750 and the maximum is 70 Lots (10500 Shares) of Rs.997,500 and for B-HNI investors Minimum is 71 Lots (10650 Shares) of Rs.1,011,750.

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	14 Lot
HNI (Min)	15 Lots
HNI (Max)	70 Lots
B-HNI (Min)	71 Lots

 

Sanstar Limited IPO Reservation

Institutional Portion	50%
Retail Share Portion	35%
Non-Institutional Portion	15%

 

Promoters And Management Of Sanstar Limited IPO

• Gouthamchand Sohanlal Chowdhary

• Sambhav Gautam Chowdhary

• Shreyans Gautam Chowdhary

Pre-Issue Promoter Shareholding	99.77%
Post-Issue Promoter Shareholding	70.37%

 

 

Sanstar Limited IPO Lead Managers

• Pantomath Capital Advisors Pvt Ltd
  
  

Dividend Policy

In any fiscal year, the company aims to pay dividends to its stockholders in the range of 7%-15% of post-tax profits.

 

Conclusion

The company has seen negative cash flow in operating and investing activities in the last few financial years but has a wide geographical presence in its business. To fulfill its objectives, the company is currently conducting an IPO for the general public.

We believe the information offered in this blog helps you learn about the company's financial performance. So this blog will be very useful to you if you are looking for information about the approaching IPO since it will give you reliable information about the company's, insights, financials, and past performance. If this informative blog piques your interest, you may be interested in reading our other related and useful posts on our website.

 

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

We believe this blog would be very beneficial to you if you are looking for such information related to this upcoming IPO since this blog would provide you with accurate information about the company's, insights, financials, and past performance. If this informative blog matches your interest, you might be interested in reading our other related useful blogs on our website.

Disclaimer: This IPO analysis is only for informational purposes and should not be considered as investment advice. Always do your research and consult with a financial advisor.

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