Shares of Sanstar debuted on positive note on Friday after blockbuster IPO. As against the IPO price of ₹95, the stock was listed at ₹109 on the NSE and rose further to ₹128.79 before settling at ₹115.07, up 21.25 per cent. On the BSE, the stock closed at ₹115.09.
While this performance is positive, it falls short of pre-listing expectations, Shivani Nyati, Head of Wealth, Swastika Investmart Ltd.
Earlier, the ₹510-crore IPO from a plant-based specialty products company saw an overwhelming response from all category of investors, as the issue was subscribed 83 times. The portions set aside for qualified institutional buyer and non-institutional investors were subscribed 145.68 times and 136.48 times respectively. The quota of retail investors received bids for 24.20 times.
The Ahmedabad-based company’s IPO consisted of a fresh issue worth ₹397.10 crore and an offer for sale of ₹113.05 crore.
Ahead of the IPO, Sanstar had raised ₹153 crore from anchor investors who included BofA Securities, Societe Generale, BOI Mutual Fund, Trust Mutual Fund, SBI General Insurance Company, Gagandeep Credit Capital, Chhattisgarh Investment, Negen Undiscovered Value Fund, SB Opportunities Fund , Finavenue Capital Trust, Intuitive Alpha Fund and Minerva Emerging Fund.
Proceeds from the fresh issue, totaling ₹181.55 crore, will fund the capital expenditure requirement for expanding the company’s Dhule facility, ₹100 crore for debt payment, and a portion for general corporate purposes.
A key supplier to FMCG companies like ITC, Hindustan Unilever, Capital Foods and Godrej Agrovet, the company currently has a cumulative capacity of 1,100 tpd of maize (Kutch and Dhule plants) and after its proposed expansion at Dhule, the total capacity is expected to reach 2,100 tpd.
The company manufactures maize starch, dextrin, liquid glucose, high-maltose maize syrup, maltodextrin, dextrose monohydrate, sorbitol, and gluten. These products are used in the food industry, pharmaceuticals, and animal nutrition.
The company exports its products to 49 countries across Asia, Africa, the Middle East, the Americas, Europe, and Oceania. It has established its presence across India and has distributed its products to 22 states.
“The company’s strong fundamentals and investor interest provide a solid foundation for future growth. Investors may hold their position at the issue price,” said Nyati.