Sanstar, the manufacturer of speciality products and ingredient solutions, will launch its maiden public issue on July 19, with a price band of Rs 90-95 per share.
The company plans to raise Rs 510.15 crore through its IPO of 5.37 crore equity shares at the upper price band.
The initial public offering is a combination of fresh issue of 4.18 crore equity shares worth 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.
Rani Gouthamchand Chowdhary will be selling 38 lakh equity shares via OFS, while Richa Sambhav Chowdhary, and Samiksha Shreyans Chowdhary will be offloading 33 lakh shares each via OFS. Gouthamchand Sohanlal Chowdhary, Sambhav Gautam Chowdhary, and Shreyans Gautam Chowdhary are the other selling shareholders among promoters, offloading 5 lakh shares each.
The Ahmedabad-based company has reserved half of its issue size for qualified institutional buyers (QIB), 35 percent for retail investors and the remaining 15 percent shares for non-institutional investors (high networth individuals).
Further, up to Rs 153 crore worth of shares out of the QIB book have been set aside for the anchor book, which will be opened for a day on July 18. The public issue will close on July 23.
Sanstar is one of the major manufacturers of plant-based speciality products and ingredient solutions in India for food, animal nutrition and other industrial applications, catering through two manufacturing facilities at Dhule in Maharashtra and Kutch in Gujarat.
Its products include liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native maize starches, modified maize starches and co-products like germs, gluten, fibre, and enriched protein.
Sanstar, which competes with Gujarat Ambuja Exports, Gulshan Polyols, and Sukhjit Starch & Chemicals will spend Rs 181.6 crore out of the net fresh issue proceeds for expansion of the Dhule facility. Another Rs 100 crore will be used to repay debts, which amounted to Rs 164.23 crore as of May 24 this year.
The remaining funds will be utilised for general corporate purposes.
The firm recorded nearly 60 percent growth in net profit at Rs 66.8 crore for the year ended March FY24, compared to Rs 41.8 crore in previous year despite a weak topline, backed by healthy operating margin with lower input cost. Revenue from operations for the year gone by was Rs 1,067.3 crore, falling 11.4 percent compared to Rs 1,205 crore revenue reported in the previous year.
EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 35.5 percent on-year to Rs 98.1 crore and margin expanded by 319 bps to 9.2 percent for the fiscal year 2024.
Furthermore, the company will finalise the basis of allotment of IPO shares by July 24, and the equity shares will be credited to demat accounts of eligible investors by July 25. The trading in its equity shares will commence on the BSE and NSE, effective July 26.
Pantomath Capital Advisors is the sole book running lead manager to the issue, while Link Intime India is the registrar to the offer.
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