Schedule of Sanstar
| Issue open date | 19 Jul 2024 |
| Issue close date | 23 Jul 2024 |
| UPI mandate deadline | 23 Jul 2024 (5 PM) |
| Allotment finalization | 24 Jul 2024 |
| Refund initiation | 25 Jul 2024 |
| Share credit | 25 Jul 2024 |
| Listing date | 26 Jul 2024 |
| Mandate end date | 07 Aug 2024 |
| Lock-in end date for anchor investors (50%) | 24 Aug 2024 |
| Lock-in end date for anchor investors (remaining) | 24 Oct 2024 |
Note: The schedule is tentative. The anchor lock-in period ends 30 days after the actual allotment date for 50% of the shares and 90 days after for the remaining portion. The allotment status can be checked on the registrar's website and the exchange website.
About Sanstar
Established in 1982, Sanstar Limited manufactures plant-based specialty products and ingredient solutions in India for food, animal nutrition, and other industrial applications. The company’s 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, amongst others. According to Frost & Sullivan, the company holds the position of the fifth-largest manufacturer of maize-based specialty products and ingredient solutions in India, boasting an installed capacity of 363,000 tons per annum (1,100 tons per day).
The specialty products and ingredients solutions by the company add taste, texture, nutrients and increased functionality to (i) foods as ingredients, thickening agents, stabilizers, sweeteners, emulsifiers, and additives (in bakery products, confectionery, pastas, soups, ketchups, sauces, creams, deserts, amongst others), (ii) animal nutrition products as nutritional ingredients, and (iii) other industrial products as disintegrants, excipients, supplements, coating agents, binders, smoothing & flattering agents, finishing agents, among others.
The company is a recognized Two Star Export house from the Director General of Foreign Trade, Government of India, while Sanstar Biopolymers Limited, the erstwhile Company that was merged with the Company in 2023 is a recognized Three Star Export House. The company has two manufacturing facilities in Maharashtra and Kutch covering a total area of 245 acres and exports its products to companies in 49 countries including Asia, Africa, the Middle East, America, Europe, and Oceania. The Domestic reach is equitable, with product distribution covering 22 states across India.
Financials of Sanstar
Issue size
| Funds raised in the IPO | Amount |
| Overall | ₹510.15 crores |
| Fresh issue | ₹397.10 crores |
| Offer for sale | ₹113.05 crores |
Utilisation of proceeds
| Purpose | INR crores (%) |
| Capital expenditure | 181.55 (45.7%) |
| Debt reduction | 100 (25.2%) |
| General corporate purposes | 228.6 (29.1%) |
*All figures except EPS are in ₹ crores
Strengths
- One of the largest manufacturers of maize-based specialty products and ingredient solutions in India: The Company ranks as the fifth-largest manufacturer in India of maize-derived specialty products, offering a diverse portfolio. This includes liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native maize starch, and modified maize starches, along with co-products like germs, gluten, fiber, and enriched protein.
- Global presence in a market with high entry barriers: Products have been exported to 49 countries across Asia, Africa, the Middle East, Europe, North America, South & Central America, and Oceania in Fiscal 2024. High entry barriers characterize the industry, including the large capital costs of building manufacturing facilities, substantial time and expenditure for research and development, the need for customer confidence and relationships which come with time, scarcity of necessary raw materials due to alternative uses, the necessity of a specific capacity for economies of scale, and competition from established players.
- Large, diversified customer base with enduring relationships: Over time, a diversified customer base has developed, spanning industries like food, animal nutrition, pharmaceuticals, paper, textile, personal care, and adhesives. Revenue contribution from the top 10 and 20 customers has significantly reduced, from 73.87% in Fiscal 2022 to 40.53% in Fiscal 2024 for the top 10 customers, and from 83.24% to 53.59% over the same period for the top 20 customers, as per Restated Consolidated Financial Statements.
Risks
- Lack of long-term contracts with suppliers: There are no current long-term contracts held with suppliers for raw materials. If future costs rise, or if there is a shortfall in the availability of these materials, the ability to navigate or harness relationships with suppliers could adversely affect business operations and outcomes.
- Exports-related uncertainties: The Company exports products globally, leading to potential exposure to import taxes or restrictions in various countries. An unfavourable shift in foreign exchange rates, the absence of fiscal benefits, or the inability to meet compliance requirements could negatively impact business operations and results.
- Highly competitive industry: The company operates within the maize-based specialty products and ingredient solutions industry. This industry is known for its fierce competition, including emerging small-scale manufacturers of maize starch and derivatives. This intensifying competition may drive down prices and lead to compromises in quality. Any inability to sustain a competitive advantage could lead to adverse effects on the business, its prospects, and financial performance.
Note:
- The above schedule is tentative. The anchor lock-in period ends 30 days after the actual allotment date for 50% of the shares and 90 days after for the remaining portion.
- The allotment status will be available by July 25, 2024, on the registrar’s website and the NSE website.