Sanstar Ltd, an Ahmedabad-based company specializing in plant-based specialty products and ingredient solutions for industrial, animal nutrition, and food applications in India, has taken a significant step toward an initial public offering (IPO) by filing its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI).
**IPO Details:**
– The IPO comprises an offer for sale (OFS) by selling shareholders for up to 8 million shares and a fresh issue of up to 40 million shares.
– The company is considering a pre-IPO placement of up to 4 million shares, subject to consultation with the Book Running Lead Manager (BRLM).
– Each share of the company’s equity has a face value of ₹2.
**Utilization of Proceeds:**
– The fresh issue proceeds, estimated at approximately ₹182 crores, will partially fund the capital expenditure required for the expansion of the Dhule facility.
– The remaining net proceeds, up to ₹100 crores, will be allocated for specific borrowing repayment and/or prepayment.
– Any surplus net proceeds after expenses will be directed towards general corporate needs and issue costs.
**Financial Highlights (FY 2023 Consolidated):**
– Revenue: Approximately ₹1,180 crores
– EBITDA: About ₹73 crores
– Profit After Tax (PAT): Roughly ₹42 crores
– Return on Equity (ROE): Approximately 28%
– Return on Capital Employed (ROCE): Approximately 24%
**Financial Performance (FY21 to FY23 Stand-Alone):**
– Revenue, EBITDA, and PAT exhibited Compound Annual Growth Rates (CAGR) of approximately 57%, 39%, and 71%, respectively.
**Global Presence:**
– Sanstar exports its products to over 45 countries across the Middle East, Africa, Asia, Americas, Europe, and Oceania.
– Exports contribute to more than 30% of the company’s total revenue.
– The company’s Kutch facility is registered with the US Food and Drug Administration (USFDA), signifying its adherence to international quality standards.
Sanstar Ltd’s decision to go public reflects its ambition for growth and expansion. The IPO’s success would not only provide capital for strategic initiatives but also enable investors to participate in the company’s promising future. The international presence and regulatory recognition, such as USFDA registration, further enhance the company’s standing in the global market.
