Sanstar Limited IPO

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They are a leading manufacturer of plant-based specialty products and ingredient solutions in India, catering to diverse sectors such as food, animal nutrition, and various industrial applications. Their extensive product range and cutting-edge manufacturing capabilities position us as a key player in the industry.

Product Portfolio

Their product offerings include:
i. Liquid Glucose                           ii. Dried Glucose Solids                      iii. Maltodextrin Powder
iv. Dextrose Monohydrate        v. Native Maize Starches                     vi. Modified Maize Starches
vii. Co-products: Germs, Gluten, Fiber, and Enriched Protein

These products serve as essential ingredients, thickening agents, stabilizers, sweeteners, emulsifiers, and additives in various food items, including bakery products, confectionery, pastas, soups, ketchups, sauces, creams, and desserts. Additionally, they enhance the nutritional value of animal nutrition products and contribute to the functionality of other industrial applications as disintegrants, excipients, supplements, coating agents, binders, smoothing & flattening agents, and finishing agents.

Market Position and Capacity

According to the Frost & Sullivan Report (May 18, 2024), they are the fifth-largest manufacturer of maize-based specialty products and ingredient solutions in India, with an installed capacity of 3,63,000 tons per annum (1,100 tons per day). Their competitive advantage stems from:
i. Technical Expertise: Delivering specific functionality and nutrition to end products.
ii. Experience: Over five decades of industry presence.
iii. Advanced Manufacturing Facilities: State-of-the-art technology.
iv. Diverse Product Portfolio: Catering to both domestic and international markets.

Export and Domestic Reach

They hold the status of a Two Star Export House, recognized by the Director General of Foreign Trade, Government of India. Their revenue from exports during Fiscal 2024 was ₹ 3,944.38 million, constituting 35.53% of their Gross Revenue from Operations. Their products were exported to 49 countries across Asia, Africa, the Middle East, Americas, Europe, and Oceania. Domestically, their footprint extends to 22 states across India.

Conclusion

Their company’s robust infrastructure, extensive product range, and strong market presence underscore their commitment to delivering high-quality plant-based specialty products and ingredient solutions. With a strategic focus on sustainability and innovation, they continue to expand our footprint both domestically and internationally, reinforcing their position as a leader in the industry.

Objects of the Sanstar Limited IPO:

The Net Proceeds of the Fresh Issue, i.e., Gross Proceeds of the Fresh Issue less the offer expenses apportioned to the Company are proposed to be utilized in the following manner: i. Funding the capital expenditure requirement for the expansion of the Dhule Facility; ii. Repayment and/or pre-payment, in part or full, of certain borrowings availed by the Company, and; iii. General Corporate Purposes. Total Number of shares issue :- i. Fresh issue is 41,800,000 shares, ii. Offer for sale is 11,900,000 shares.
DRHP of Sanstar Limited IPO
RHP of Sanstar Limited IPO

Sanstar Limited IPO Details:

Open Date: Jul 19 2024
Close Date: Jul 23 2024
Total Shares: 53,700,000
Face Value: ₹ 2 Per Equity Share
Issue Size: 510.15 Cr.
Lot Size: 150 Shares
Issue Price: ₹ 90 - 95 Per Equity Share
Listing At: NSE,BSE
Listing Date: Jul 26 2024

Promoters And Management:

Gouthamchand Sohanlal Chowdhary, aged 66 years, is the Chairman and Managing Director of the Company. He is one of the Promoters of the Company and has been associated with the Company since February 22, 2012. He has completed his schooling from Monfort School Yercaud, Tamil Nadu. He has served on the board of Sanstar Biopolymers Limited (merged with the Company vide order dated November 23, 2023 passed by NCLT, Ahmedabad) for a period of 38 years since September 27, 1985. He supervises the overall functions of the Company and is responsible for overseeing the strategic growth initiatives and expansion plans. Sambhav Gautam Chowdhary, aged 41 years, is the Joint Managing Director and one of the Promoters of the Company. He has been associated with the Company since February 22, 2012. He holds a bachelor’s degree in engineering from the Gujarat University. He has served on the board of Sanstar Biopolymers Limited (merged with the Company vide order dated November 23, 2023 passed by NCLT, Ahmedabad) for a period of 13 years since March 30, 2011. During the year 2005-06, he was employed with Infosys Technologies Limited. He is responsible for day to day operations and expansion plans of the Company. Shreyans Gautam Chowdhary, aged 39 years, is the Joint Managing Director and one of the Promoters of the Company. He has been associated with the Company since February 22, 2012. He holds a bachelor’s degree in engineering from the Gujarat University and master’s degree of Science in Management with a Specialism in Marketing from The City University London Sir John Cass Business School. He has served on the board of Sanstar Biopolymers Limited (merged with the Company vide order dated November 23, 2023 passed by NCLT, Ahmedabad) for a period of 13 years since March 30, 2011. He is responsible for management of commercial and sales related aspects.

Financials of Sanstar Limited IPO:

A. Balance Sheet
Particular (In Million) Mar-22 Mar-23 Mar-24
Equity Share Capital 295.00 280.89 280.89
Reserves 557 1,590 2,257
Borrowings 852 1,117 1,276
Trade Payables 180 303 960
Other Liabilities 190 392 502
Total Liabilities 1,222 1,812 2,738
Net Block 1,331 1,957 2,021
Capital Work in Progress 33 9 205
Investments 0 2 2
Other Assets 2 21 13
Total NC Assets 1,366 1,989 2,241
Receivables 402 912 1,175
Inventory 127 265 1,140
Cash & Bank 18 66 52
Other Assets 162 451 668
Face value 2 2 2
B. Profit & Loss Statement
Particular (In Million) Mar-22 Mar-23 Mar-24
Sales 5,044 12,051 10,673
Raw Material Cost 3,915 9,589 8,329
Purchases of Stock In Trade 0 12 0
Change in Inventory -44 25 -67
Employee Cost 105 193 220
Other Expenses 671 1,508 1,209
Other Income 4 46 144
EBITDA 401 770 1,126
EBITDA Margin 7.95% 6.39% 10.55%
Depreciation 90 119 121
Interest 91 98 107
Profit before tax 220 554 897
Tax 61 136 230
Net profit 159 418 668
NPM (%) 3.15% 3.46% 6.17%
C. Cash Flow Statement
Particular (In Million) Mar-22 Mar-23 Mar-24
Cash From Operating Activity
Profit From Operation 397 763 1,116
Receivable -193 -510 -267
Inventory 20 -139 -875
Payable 86 122 657
Loans And Advances -1 0 0
Other WC Items 47 -243 -178
Working Capital Changes -43 -769 -663
Direct Taxes -57 -54 -167
Net Cash Inflow from Operating Activity 297 -60 286
Cash from Investing Activity
Fixed assets purchased -18 -747 -408
Fixed assets sold 0 2 28
Investments purchased 0 0 -2
Other investing items -27 31 13
Net cash inflow from investing activities -45 -714 -369
Cash from Financing Activity
Proceeds from shares 0 -14.11 0.00
Proceeds from borrowings 56 497 193
Repayment of borrowings -219 -233 -34
Intrest paid fin -87 -98 -107
Other financing items 0 678 0
Net Cash Flow 2 56 -31

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Sanstar Limited 1067 67 3.66 25.9 95 1,731
Gujarat Ambuja Exports Limited 4,927 346 7.54 18.3 138 6,334
Gulshan Polyols Limited 1,378 18 2.83 70.1 200 1,247
Sukhjit Starch and Chemicals Limited 1,375 50 31.98 15.3 489 764
* All the data is as per FY24.

Recommendation on Sanstar Limited IPO:

Review and Recommendation of Sanstar by team IZ is 5/10. 1. Sanstar Limited is a leading manufacturer of plant-based specialty products and ingredient solutions in India, catering to the food, animal nutrition, and industrial applications sectors. Their diverse product range and commitment to quality have established them as a significant player in the industry, providing innovative solutions that enhance taste, texture, and functionality. 2. Product Portfolio They offer a wide array of products, including: i. Liquid Glucose                              ii. Dried Glucose Solids                  iii. Maltodextrin Powder iv. Dextrose Monohydrate              v. Native Maize Starches               vi. Modified Maize Starches vii. Co-products:- such as germs, gluten, fiber, and enriched protein. Their specialty products serve various functions across different applications: i. Food Industry: Ingredients, thickening agents, stabilizers, sweeteners, emulsifiers, and additives used in bakery products, confectionery, pastas, soups, ketchups, sauces, creams, and desserts. ii. Animal Nutrition: Nutritional ingredients enhancing the quality of animal feed. iii. Industrial Applications: Disintegrants, excipients, supplements, coating agents, binders, smoothing agents, and finishing agents. 3. Export and Domestic Market Presence They are recognized as a Two Star Export House by the Director General of Foreign Trade, Government of India. Their merged entity, Sanstar Biopolymers Limited, is a recognized Three Star Export House. Their products reached 49 countries across Asia, Africa, the Middle East, the Americas, Europe, and Oceania. Domestically, their products are sold in 22 states, demonstrating a strong national footprint. 4. Competition They face competition from both global and domestic players. Key factors contributing to their competitiveness include: i. Market Understanding           ii. Customer Interaction        iii. Product Development iv. High Entry Barriers 5. The Revenue has Increased from Rs.504 Crores in FY22 to Rs.1067 Crores in FY24. 6. The EBITDA has Increased from 40 Crores in FY22 to 112 Crores in FY24. 7. The PAT has Increased from 16 Crores in FY22 to 67 Crores in FY24. 8. As per FY24, CFO/EBITDA is 0.99, and EPS is 3.66, 9. Market Capitalization is 1,731 Crores and P/E is 25.9x based on FY24.

Lead Manager of Sanstar Limited IPO:

  1. Pantomath Capital Advisors Private Limited

Registrar of Sanstar Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Sanstar Limited Sanstar House, near Parimal Under Bridge, Opp. Suvidha Shopping Centre, Paldi, Ahmedabad – 380 007 Phone: +91 79 26651819 Email: cs@sanstar.in Website: https://www.sanstar.in/

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