???? Promoters: Gouthamchand Sohanlal Chowdhary, Sambhav Gautam Chowdhary, and Shreyans Gautam Chowdhary.
2. ???? Industry Overview
Sanstar Limited operates in the maize-based specialty products and ingredient solutions industry. According to the Frost & Sullivan report, this industry is characterized by increasing demand due to its wide applications in various sectors such as food and beverages, pharmaceuticals, textiles, and paper. The Global maize based speciality products and ingredients solutions industry is estimated to be valued at $ 45,195 million in 2023 and is estimated to grow to $ 58,021 million in 2029. Similarly, the Indian industry is estimated to be valued at $ 3,121 million in 2023 and is estimated to grow to $4,210 million in 2029.
3. ???? Peer Group Comparison and Financial Analysis
Sanstar Limited's peers in the industry include companies like Gulshan Polyols Limited, Gujarat Ambuja Exports and Sukhjit Starch Limited. Key financial metrics to consider for comparison are revenue growth, profit margins, and return on equity.
???? Revenue from Operations: Gujarat Ambuja Export is the largest in the terms of revenue with 5071 Cr v/s all other peer companies near to 1000 Cr.
???? Profit margin% as well as Ronw% for Gujarat Ambuja Exports are also better than all peer group.
???? Debt ToEquity Ratio: D2E ratio for Gujarat Ambuja is favourable as 0.07 V/s Sanstar 0.5 and all others are near to 0.5 to 0.7.
Considering the peer group Gujarat Ambuja Export seems to be the best for long term.
4. ???? Details of the Offer
???? Fresh Issue Size: Up to 41,800,000 equity shares.
???? Offer for Sale: Up to 11,900,000 equity shares.
???? Total Offer Size: Up to 53,700,000 equity shares.
???? Offer Price Range: ₹90.00 - ₹95.00 per equity share.
???? Floor Price: ₹90 per equity share.
???? Cap Price: ₹95 per equity share.
???? Minimum Bid Lot: 150 equity shares.
5. ???? Object of the Offer
The net proceeds from the IPO are intended to be used for the following purposes:
???? Funding capital expenditure requirements for the company's manufacturing facilities.
???? Repayment of certain borrowings.
???? General corporate purposes.
6. ???? Future Outlook
Sanstar Limited aims to capitalize on the growing demand for maize-based specialty products. The company plans to expand its manufacturing capabilities and enhance its market presence in both domestic and international markets. Key growth drivers include innovation in product offerings and expanding applications in various industries.
7. ⚠ Risks and Concerns
Potential risks include fluctuations in raw material prices (primarily maize), regulatory changes, competition from other established players, and dependence on a limited number of customers for a significant portion of revenue.
Additional Relevant Information
???? Promoter's Contribution: The promoters are required to hold a minimum of 20% of the post-offer paid-up equity share capital for a period of 3 years from the date of allotment.
???? Conclusion
Sanstar Limited's IPO presents an opportunity for investors to invest and gain (probability) of around 25% as per grey market, but for long term Gujarat Ambuja Export should be more advisable. However, investors should carefully consider the risks and conduct thorough due diligence before making an investment decision.
Disclosure: Do not buy or sell following others, check the data on your own and if relevant can invest.
