Sanstar IPO - Investment Rationale, Valuations, Strategies, Financials And More: Anand Rathi

Anand Rathi Report

Sanstar Ltd. will launch its initial public offering tomorrow and the offer will close for subscription on July 23.

The leading Indian manufacturer of plant-based specialty products and ingredient solutions for food, animal nutrition, and industrial applications has fixed the price band in the range of Rs 90 to Rs 95 Apiece. The minimum order lot size for bidding is 150 shares.

The Rs 510.15 crore IPO comprises of fresh issue of 4.18 crore shares and an offer-for-sale component consisting of 1.19 crore shares.

Object of fresh issue:

• Funding the capex requirement for expansion of their Dhule Facility.

• Repayment and/or pre-payment, of certain borrowings availed.

• General corporate purposes.

Valuation and Outlook

Sanstar Ltd. is India's fifth-largest producer of maize-based specialty products and ingredient solutions. They began commercial production at their Kutch, Gujarat, and Dhule, Maharashtra facilities in 2006 and 2017, respectively, and have grown to an annual capacity of 363,000 tons.

The company's price to earning ratio is 25.7 times based on its FY24 earnings, with a market capitalization of ₹17,313.2 million after the issuance of equity shares and a market cap-to-sales ratio of 1.62 times its FY24 earnings.

Sanstar Ltd is poised for strong growth due to increasing global demand for plant-based products and strategic capacity expansion at its Dhule facility.

Sanstar emphasis on high-margin, value added products and industry-specific new launches will drive margin expansion, further supported by debt reduction. Looking at these factors we recommend “Subscribe – Long Term” rating to the IPO.

Click on the attachment to read the full IPO report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.