Despite the strong response to the IPO, which was subscribed nearly 83 times, the listing price was lower than expected.
Following the listing of the stocks, Prashanth Tapse, Senior VP (Research) at Mehta Equities, said, “Despite markets being on a positive note, Sanstar listing was below our listing expectation of ~22-25% while post listing the stock is headed towards our expectation. Despite market upbeat mood we still continue to recommend allotted investors to book profits on listing day. We are not comfortable on the valuations which were slightly on the expensive side when compared to other listed peers.”
Meanwhile, Shivani Nyati, Head of Wealth at Swastika Investmart, said, “Sanstar made a solid debut on the stock market, listing at Rs 109 per share, a 14.74% premium. While this performance is positive, it falls short of pre-listing expectations, likely influenced by the broader market volatility following the budget announcement.”
“Sanstar’s listing, while not reaching the initial hype, is a positive development. The company’s strong fundamentals and investor interest provide a solid foundation for future growth. Investors may hold their position at the issue price,” Nyati said.The issue was subscribed nearly 83 times, driven by strong demand from non-institutional and institutional investors. The qualified institutional investors (QIB) led the pack, subscribing 145.68 times their allocation. Non-institutional investors followed closely, buying 136.5 times their portion, while retail investors showed strong interest by subscribing 24.23 times the reserved portion.The company plans to use net proceeds from the fresh issue for expanding its Dhule facility, repay debt and other general corporate purposes.Sanstar is a major manufacturer of plant-based specialty products and ingredient solutions in India for food, animal nutrition, and other industrial applications. Its products include liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native maize starches, modified maize starches, and co-products like germs, gluten, fiber, and enriched protein, among others.
In FY24, Sanstar’s revenue from exports was Rs 394.44 crore, representing 35.53% of its gross revenue from operations, based on its restated consolidated financial statements. The company exported its products to 49 countries across Asia, Africa, the Middle East, the Americas, Europe, and Oceania during Fiscal 2024.
Its revenue from operations has increased at a compound annual growth rate (CAGR) of 45.46%, from Rs 504 crore in FY22 to Rs 1067 crore in FY24, while its profit after tax grew at a CAGR of 104.79%, from Rs 15.9 crore to Rs 66.7 crore in the same period.
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