Sanstar Limited is one of the major manufacturers of plant based speciality products and ingredient solutions in India for food, animal nutrition and other industrial applications. The products include liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native maize starches, modified maize starches and co-products like germs, gluten, fiber and enriched protein, amongst others. The speciality products and ingredients solutions add taste, texture, nutrients and increased functionality to (i) foods as ingredients, thickening agents, stabilizers, sweeteners, emulsifiers and additives (in bakery products, confectionery, pastas, soups, ketchups, sauces, creams, deserts, amongst others), (ii) animal nutrition products as nutritional ingredients, and (iii) other industrial products as disintegrants, excipients, supplements, coating agents, binders, smoothing & flattering agents, finishing agents, among others. With an installed capacity of 3,63,000 tons per annum (1,100 tons per day), they are the fifth largest manufacturer of maize based speciality products and ingredient solutions in India. The two manufacturing facilities spread across cumulative area of 10.68 million square feet (approximate 245 Acres) are located at Dhule in the state of Maharashtra and Kutch in the state of Gujarat. The manufacturing facilities are strategically located in terms of both proximity to the raw material sources i.e. maize harvesting belts as well as seaports of Mundra, Kandla, Hazira and Nhava Sheva, for exports of the finished products. The Dhule Unit has been duly certified in accordance with FSSAI, FSSC 22000:2018, Kosher, HALAL, International Standards for Quality Management Systems as per ISO 9001:2015 and SGS's Certificate for India's National Programme for Organic Production Standards, amongst others. Similarly, the Kutch unit is registered with United States Food and Drug Administration (USFDA) and also hold certifications like FSSAI, HACCP, HALAL, ISO 9001:2015. They are a recognised Two Star Export house from Director General of Foreign Trade, Government of India, while Sanstar Biopolymers Limited, the erstwhile Company which was merged with the Company pursuant to NCLT, Ahmedabad order dated November 23, 2023, is a recognised Three Star Export House. During Fiscal 2024, the revenue from exports was Rs 3,944.38 million respectively, representing 35.53 % of the Gross Revenue from Operations, on the basis of the Restated Consolidated Financial Statements. They exported the products to 49 countries across Asia, Africa, Middle East, Americas, Europe and Oceania, during Fiscal 2024, on the basis of the Restated Consolidated Financial Statements. Additionally, the Company has footprints across India, with its products being sold in 22 states. As per financial performance, Sanstar Limited has posted total income / net profits of Rs 504.76 Cr / Rs 15.92 Cr (FY22), Rs 1,209.66 Cr / 41.80 Cr (FY23) and Rs 1,081.68 Cr / Rs 66.76 Cr (FY24). So as per previous financials data, company has shown good results. Company has an average EPS of Rs 3.55 and average RoNW of 30.22% for last three fiscals. Issue is priced at a P/BV of 2.82 as per NAV of Rs 33.64/- as on post issue. If we attribute latest earnings of FY22, FY23, and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 108.74, 41.41, and 25.93 respectively, which looks fully priced. As per RHP, comparison between listed peers is given in above table. On BRLM's front, one lead managers are associated with this IPO, and have handled around 8 IPOs ( Mainboard and SME ) in last three fiscals. Pantomath Capital Advisors Private Limited: This is 9th IPO from this BRLM. From last 8 IPOs, all opened above issue price on the day of listing. As of now, from last 8 IPOs, all are trading above issue price. (As on 13.07.23) As per financials, Sanstar Limited has shown good results, RoNW is 30.92% and P/E is respectively 108.74, 41.41, and 25.93 as per FY22, FY23, and FY24 earnings. So, issue looks fully priced. Company is in manufacturing of plant based speciality products and ingredient solutions for food, animal nutrition and other industrial applications, which is highly competitive and fragmented business segmented. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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