Last day Alert! Sanstar IPO closes today; should you bid? Check GMP & more

The three-day subscription window to apply for the Sanstar IPO, which opened on Friday, July 19, 2024, closes today. Sanstar IPO was subscribed 13.56 times by July 22, 2024

Sanstar IPO subscription Day 3: The initial public offering of Sanstar Limited has, so far, received a positive response from investors. The public issue has been subscribed 13.56 times by the end of the second day of subscription. The three-day subscription window to apply for the Sanstar IPO, which opened on Friday, July 19, 2024, closes today. Available at the price band of Rs 90 - Rs 95 per share and a lot size of 150 shares, the Sanstar IPO has been subscribed 12.29 times in the retail category and 32.91 times in the NII category, while the QIB category has received 1.29 times subscription.

 

Sanstar IPO comprises a fresh issue of 41,800,000 shares aggregating up to Rs 397.10 crore and an offer for sale of 11,900,000 shares aggregating up to Rs 113.05 crore. Investors can bid for a minimum of 150 shares and in multiples thereof. The minimum amount required by a retail investor to subscribe for the Sanstar IPO is Rs 14,250.

Sanstar IPO GMP

The unlisted shares of Sanstar Limited are commanding a strong premium on the last day of subscription. As per several websites that track the grey market activities, the Sanstar shares are trading at a premium of Rs 30-40 or 31 per cent - 42 per cent from the upper end of the issue price of Rs 95. This indicates solid listing gains for investors.

Sanstar IPO allotment, listing date

The basis of allotment of the Sanstar IPO shares is scheduled for Wednesday, July 24, 2024, while the shares are likely to be credited to Demat accounts on Thursday, July 25, 2024. The tentative listing date of the Sanstar IPO is Friday, July 26, 2024. The company's shares will be listed on the NSE and BSE.

Sanstar IPO anchor book

Link Intime India Private Ltd is the registrar for the Sanstar IPO, while Pantomath Capital Advisors Pvt Ltd is the book-running lead manager of the public issue. Sanstar has already raised Rs 153.04 crore from anchor investors, ahead of the IPO, on Thursday, July 18, 2024.

Sanstar IPO objectives

The company intends to use the net proceeds from the IPO for funding the capital expenditure requirement for the expansion of the Dhule Facility. Sanstar will use the remaining proceeds from the IPO for the repayment and/or pre-payment of certain borrowings availed by the company and for general corporate purposes.

Should you subscribe to the Sanstar IPO?

The brokerage firms Swastika Investmart and Master Capital Service remain optimistic about the Sanstar IPO and have shared mostly positive outlooks on the public issue. Here's what the brokerages have said about the Sanstar IPO:

Swastika Investmart - Subscribe for listing gain

According to Shivani Nyati, Head of Wealth at Swastika Investmart, Sanstar's financial performance presents a mixed picture, with recent declines in revenue but growth in profitability. However, some key risks require careful consideration. Fluctuations in raw material prices, exposure to global market volatility, intense competition, and a lack of diversification beyond maize-based products pose challenges for future growth.

"The IPO valuation of 20x P/E appears fully priced. While we acknowledge the potential for listing gains, a cautious approach is warranted due to the aforementioned risks. Thus, we recommend a subscribe rating for this IPO for listing gain," said Nyati.

Master Capital Service - Subscribe with a long-term view

Sanstar is looking to pay off its debt, strengthen its balance sheet, and invest in building additional capacity to fuel their growth, said Master Capital Service. Post the proposed expansion, the capacity, the brokerage said, will almost double from current levels, creating a huge headroom for growth.

"The current capacity is already 90 percent filled and the capex for expansion has already started. The valuation of the IPO is at par with the listed peers, but given the growth prospects, we advise to Subscribe to the IPO keeping a long-term view," said the brokerage.

About Sanstar Limited

Sanstar Limited, a leading Indian manufacturer of maize-based specialty products and ingredient solutions, caters to a diverse range of industries in both domestic and global markets. The company boasts strategically located, state-of-the-art manufacturing facilities with a focus on sustainability, and has established a large and diversified customer base.