Sanstar Ltd has filed its draft Red Herring Prospectus (DRHP) with capital markets regulator Securities and Exchange Board of India (SEBI) for an initial public offering (IPO).
Sanstar Limited, an Ahmedabad-based company, produces specialty plant-based products and ingredient solutions for use in industrial, animal nutrition and food applications in India.
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The IPO consists of an offer for sale (OFS) from the selling shareholders for up to 8 million shares and a fresh issue of up to 40 million shares. Subject to consultation with the Book Running Lead Manager (BRLM), the Company may consider a pre-IPO placement of up to 4 million shares. A share of the company's equity has a nominal value of ₹2.
The capital expenditure required for the expansion of the Dhule facility would be partially funded by the proceeds from the new issue up to approx ₹182 crores while the remaining net is up to ₹100 crores would be used for repayment and/or early repayment of loans. The net proceeds remaining after expenses would be used for general corporate needs and issuance costs.
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On a consolidated basis, the company's sales in the 2023 financial year amounted to approx ₹EBITDA was around 1,180 Crores ₹73 cores and the profit after tax (PAT) was approximately ₹42 crores. The company's ROE and ROCE were around 28% and 24%, respectively. On a standalone comparison, revenue, EBITDA and PAT increased at an annual growth rate of approximately 57%, 39% and 71% respectively between FY21 and FY23.
Sanstar exports to more than 45 countries in the Middle East, Africa, Asia, America, Europe and Oceania. Exports account for more than 30% of the company's total sales. Notably, the company's Kutch location is registered with the US Food and Drug Administration (USFDA).
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