Sanstar Limited, a leading Indian manufacturer of plant-based specialty products and ingredient solutions, is set to debut on the mainboard with its upcoming IPO. This article explores the details, potential, and considerations surrounding the Sanstar IPO to help you decide if it aligns with your investment goals.

Timeline

IPO Open Date:	July 19, 2024
IPO Close Date:	July 23, 2024
Basis of Allotment:	July 24, 2024
Refunds:	July 25, 2024
Credit to Demat Account:	July 25, 2024
IPO Listing Date:	July 26, 2024

About Company

Sanstar caters to the growing demand for plant-based ingredients and solutions across various industries, including food, animal nutrition, and other industrial applications. This focus on a trending segment with increasing consumer awareness positions them for potential growth.

• Food: Sanstar offers plant-based ingredients used in various food products.
• Animal Nutrition: Their solutions find application in animal feed formulations.
• Other Industrial Applications: Sanstar’s plant-based ingredients might be used in non-food industrial processes.

Manufacturing Capabilities:

• Sanstar has a strong manufacturing presence with 1100 metric tons per day of installed capacity spread across 13 manufacturing facilities in India.
• In-house production allows them greater control over quality and potentially reduces dependence on external suppliers.

Products:

Sanstar boasts a comprehensive product portfolio encompassing:

• Liquid glucose and dried glucose solids
• Maltodextrin powder and dextrose monohydrate
• Native and modified corn starches
• By-products like germ, gluten, fiber, and fortified proteins

This diverse product base allows them to cater to a wide range of customer needs.

Market Position:

• Sanstar is a well-established player in the Indian plant-based food and ingredient solutions market.
• They leverage their experience and expertise to cater to the growing demand for plant-based alternatives.

Future Outlook:

• The plant-based food market is projected for significant growth, driven by rising health and environmental concerns. Sanstar is well-positioned to capitalize on this trend.
• They might explore expanding their product portfolio and geographical reach to cater to new markets and customer demands.

Here are some resources to learn more about company

• Company Website:https://www.sanstar.com/

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Objective

The Company proposes to utilise the Net Proceeds towards funding the following objects:

• Funding the capital expenditure requirement for the expansion of the Dhule Facility;
• Repayment and/or pre-payment, in part or full, of certain borrowings availed by the Company, and;
• General Corporate Purposes.

POSITIVE

• Industry Growth: The plant-based food market is projected to experience significant growth in the coming years.
• Diversified Product Portfolio: Sanstar offers a range of plant-based solutions, reducing dependence on any single product category.
• Manufacturing Capabilities: Their in-house manufacturing facilities provide greater control over production and quality.

NEGATIVE

• Competition: The plant-based food sector is attracting new players, leading to a competitive landscape.
• Raw Material Dependence: Fluctuations in the prices of raw materials like plant-based proteins can impact profitability.
• Limited Track Record: A comprehensive financial analysis is needed to assess their profitability and future growth plans (information will be available in the IPO prospectus).

So,how does Sanstar Limited IPO Fare in Terms of Financials ?

Financial Details

Period Ended	31 Mar 2024	31 Mar 2023	31 Mar 2022
Assets	527.57	368.35	207.45
Revenue	1,081.68	1,209.67	504.77
Profit After Tax	66.77	41.81	15.92
Net Worth	215.91	149.28	48.97
Reserves and Surplus	225.18	158.41	55.69
Total Borrowing	127.64	111.70	85.22
Amount in ₹ Crore

FINANCIAL REVIEW

Positives:

Revenue Growth:

• Sanstar’s revenue has shown impressive growth over the past three years. They’ve nearly doubled their revenue from ₹504.77 crore in March 2022 to ₹1,081.68 crore in March 2024, indicating strong sales momentum.

Profitability:

• Profit After Tax (PAT) has fluctuated slightly over the three years. While it shows an increase of ₹24.96 crore between 2022 and 2024, a more in-depth analysis is needed to assess profitability trends.

Sanstar Limited IPO Valuation :

Earning Per Share (EPS):	4.75 per Equity Share
Price/Earning P/E Ratio:	19.98
Return on Net Worth (RoNW):	30.92%
Net Asset Value (NAV):	₹ per Equity Share

Sanstar Limited IPO – SWOT Analysis

Strengths

• Industry Growth Potential: The plant-based food market is experiencing significant growth, driven by rising consumer awareness of health and environmental concerns. Sanstar is well-positioned to capitalize on this trend.
• Diversified Product Portfolio: Sanstar offers a range of plant-based ingredients and solutions across various industries, reducing risk from overdependence on any single product category.
• Manufacturing Capabilities: Having in-house manufacturing facilities allows Sanstar greater control over production processes, quality assurance, and potentially cost-efficiency.
• Established Brand Recognition (if applicable): A strong brand name in the plant-based space can provide a competitive advantage.

Weaknesses

• Limited Track Record of Profitability (if applicable): A young company might not have a proven track record of profitability, making future performance less certain.
• Dependence on Raw Material Prices: Fluctuations in the prices of plant-based proteins and other key ingredients can impact profitability margins.
• Competition: The plant-based food sector is attracting new players, leading to an increasingly competitive landscape. Sanstar needs a well-defined strategy to stand out.

Opportunities

• Expanding Product Portfolio: Sanstar can explore developing new plant-based solutions to cater to evolving consumer preferences and market demands.
• Geographic Expansion: The plant-based food trend is global. Sanstar can explore exporting their products to new markets.
• Strategic Partnerships: Collaboration with established players in the food and beverage industry can accelerate market reach and brand recognition.

Threats

• Consumer Preferences: Consumer preferences in the plant-based food market can change rapidly. Sanstar needs to be adaptable and innovative to stay relevant.
• Government Regulations: Changes in government regulations regarding food safety, labeling, or genetically modified organisms (GMOs) can impact Sanstar’s operations.
• Economic Slowdown: An economic slowdown can lead to reduced consumer spending, potentially impacting Sanstar’s sales.

COMPETITIVE ANALYSIS: MARKET PEERS

Sanstar Limited operates in the growing plant-based food and ingredient solutions market. Here’s a breakdown of some potential market peers to consider when analyzing Sanstar’s competitive landscape:

Established Players:

• Gulshan Polyols Limited: A leading manufacturer of starch-based products and specialty ingredients, including plant-based hydrocolloids and texturizers. They offer a broad product portfolio that might overlap with Sanstar’s offerings in certain sectors.
• Sukhjit Starch & Chemicals Ltd.: Another established player in the starch and specialty ingredients market, Sukhjit might compete with Sanstar for raw materials and market share in certain product categories.

Plant-Based Food Companies:

• GoodDot: A leading player in the Indian plant-based meat alternatives market, GoodDot offers ready-to-eat products that could be considered substitutes for some of Sanstar’s plant-based ingredients. Analyzing their market share, product innovation, and marketing strategies can provide valuable insights.
• Imagine Meats: Another competitor in the plant-based meat space, Imagine Meats focuses on developing realistic plant-based meat alternatives. Understanding their product offerings and target markets will help assess Sanstar’s competitive positioning.

Considerations for Peer Analysis:

• Product Overlap: Analyze the extent to which Sanstar’s product portfolio overlaps with its peers in terms of ingredients, solutions, and target industries.
• Market Share: Compare Sanstar’s market share with its peers in specific segments of the plant-based food and ingredient market.
• Financial Performance: If financials are available, compare profitability margins, revenue growth rates, and debt levels to assess Sanstar’s financial health relative to its competitors.
• Innovation and Marketing: Evaluate Sanstar’s research and development (R&D) efforts, product innovation pipeline, and marketing strategies compared to its peers.

Sanstar Limited IPO GMP

• Grey market premium as on DD-MM-YYYY = Rs / Share

Disclaimer:

• IPO Grey Market Premium (Sanstar Limited IPO GMP) mention is valid for the specific date as mentioned in the header.
• We are not buying and selling IPO forms on IPO Grey Market.
• Don’t decide to subscribe to an IPO just based on the initial price, as it can change before the listing.Subscribe only considering Fundamentals of the companies.

Sanstar Limited IPO

🔴 Live Subscription Status 🔴

19/07/2024 10:00 AM

	NO OF SHARES OFFERED	Day 1	Day 2	Day 3
Qualified Institutional Buyers(QIBs)
Non Institutional Investors(NIIs)
Retail Individual Investors(RIIs)
Employee
Total

FINAL TAKEAWAY

✅ May Apply

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