Ahmedabad based Sanstar Limited files DRHP for IPO

Ahmedabad: Sanstar Limited (“Sanstar” or “the Company”), one of the largest manufacturers of Plant-based Specialty Products and Ingredient Solutions in India for Food, Animal Nutrition, and Industrial Applications has filed its Draft Red Herring Prospectus (DRHP) with SEBI for IPO. Sanstar is the 3rd largest manufacturer of Maize based Speciality Products and Ingredient Solutions in India with an installed capacity of 1,100 tons per day through two state of the art manufacturing facilities at Dhule in Maharashtra and Kutch in Gujarat. Sanstar is promoted by two generations of the Promoters having cumulative experience of over 6 decades in the industry, the company said in press statement.

As per the press statement, “Sanstar exports to over 45 countries across Asia, Americas, Europe and Oceania, Middle East and Africa and derives more than 30% of the revenue from exports. Notably, the Kutch facility of the Company is registered with United States Food and Drug Administration (USFDA). The manufacturing facilities of the Company are spread across cumulative land area of approximate 245 acres (~11 million square feet) with ample scope for expansion. During FY 2023, on a Consolidated basis, the Company generated Rs ~1,180 crores of revenue, ~73 cores of EBITDA and ~ 42 crores of Profit After Tax (PAT) while ROE and ROCE were ~28% and 24% respectively. Revenue, EBITDA and PAT have grown at a CAGR of ~57%, ~39% and ~71% respectively during FY21-FY23, on a Standalone basis.”

“To tap the next phase of the growth and market leadership, the Company is in the process of expanding the capacity at Dhule facility on the existing land which is expected to add 1,000 tons per day in capacity. The expansion is being majorly financed out of IPO Proceeds,” the statement added.

The company also states that ,”The IPO comprises Fresh Issue of upto 40 million shares and an Offer for Sale of upto 8 million shares by the selling shareholders. The Company, in consultation with the Book Running Lead Manager, may consider undertaking a Pre-IPO placement of upto 4 million shares. The Face Value of the Equity Shares of the Company is Rs 2 per share.”

“The Fresh Issue proceeds (or “Net Proceeds”) upto Rs ~182 crores would be utilised for funding the capital expenditure requirement for expansion of the Dhule facility while upto Rs 100 crores of Net Proceeds would be utilised for repayment and/or pre-payment of certain borrowings. Balance Net Proceeds would be utilised for General Corporate Purposes and Issue Expenses,” said the company.

“Pantomath Capital Advisors Private Limited is the sole Book Running Lead Manager. Company’s equity shares are proposed to be listed on the BSE and NSE,” the press release stated.