Sanstar Limited, founded in 1982, specializes in manufacturing specialty plant-based products and ingredient solutions for the food, pet food, and various industrial applications in India. The company’s diverse product portfolio includes liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native maize starches, and modified maize starches. In addition to these primary products, Sanstar Limited also produces by-products such as germ, gluten, fiber, and fortified proteins.

These products are used in food as ingredients, thickeners, stabilizers, sweeteners, emulsifiers, and additives (in baked goods, confectionery, pasta, soups, sauces, creams, and desserts) and in pet food as nutritional ingredients.

Sanstar IPO Objective

The net proceeds from the fresh issue, defined as the gross proceeds minus the offer expenses allocated to the company, are proposed to be utilized as follows:

  • Funding the capital expenditure required for the expansion of the Dhule facility.
  • Repayment and/or pre-payment, either in part or in full, of certain borrowings by the company.
  • General corporate purposes.

Sanstar IPO Details:

IPO DateJuly 19, 2024 to July 23, 2024
Face Value₹2 per share
Price Band₹90 to ₹95 per share
Lot Size150 Shares
Total Issue Size53,700,000 shares(Total up to ₹510.15 Cr which includes OFS ₹113.05 Cr +Fresh Issue ₹397.10 Cr)
Issue TypeBook Built Issue IPO
Listing AtBSE, NSE

Sanstar IPO raises ₹153.05 crore from anchor investors, with the anchor bid date on July 18, 2024.

Risks Associated with the Company:

Company lacks long-term customer contracts, relying solely on purchase orders for product delivery. The top 10 customers, contributing 59% of our total revenue, wield significant influence, any loss or reduced demand from them could greatly impact our business and financial stability.

The company requires various approvals, NOCs (No Objection Certificates), licenses, registrations, and permits as part of its regular business operations.

Financials of the Sanstar:

Period Ended31 Mar 202431 Mar 202331 Mar 2022
Revenue1,081.681,209.67504.77
Growth %-10.58%139.65%
Profit After Tax66.7741.8115.92
Growth %59.70%162.63%
Assets527.57368.35207.45
Net Worth215.91149.2848.97
Reserves and Surplus225.18158.4155.69
Total Borrowing127.64111.785.22

The company experienced a negative revenue growth of -10.58% following a previous spike of 139.65%. Despite this, it remained profitable with margins increasing to 6% in FY2024 from 3.45% in FY2023 and 3.15% in FY2022. Borrowings increased from 85 Cr to 127 Cr, and assets grew 2.5 times their 2022 level.

Key Performance Indicators:

KPIValues
ROE30.92%
ROCE24.43%
Debt/Equity0.5
RoNW30.92%
P/BV6.18
Pre IPOPost IPO
EPS (Rs)4.753.66
P/E (x)19.9825.93


The EPS decreased from 4.75 Rs to 3.66 Rs post-IPO, likely due to share dilution from the issuance of additional shares, thereby spreading the earnings over a larger number of shares.

The P/E ratio increased from 19.98x to 25.93x post-IPO shows investors are willing to pay more for each unit of net income post-IPO, indicating higher investor confidence in the company’s future growth and market perception.

About Promoters and IPO Reservations

Gouthamchand Sohanlal Chowdhary, Sambhav Gautam Chowdhary, and Shreyans Gautam Chowdhary are the company’s promoters.

Shareholding Pre Issue99.77%
Shareholding Post Issue70.37%


Reservation:

Investor CategoryShares Offered
QIB Shares OfferedNot more than 50.00% of the Net offer
Retail Shares OfferedNot less than 35.00% of the Offer
NII (HNI) Shares OfferedNot less than 15.00% of the Offe