Sanstar IPO Review

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, with an installed capacity of 1,100 metric tons per day.
 
The Company is led by the professional promoters named, GOUTHAMCHAND SOHANLAL CHOWDHARY has served on the board of Sanstar Biopolymers Limited for a period of 38 years, SAMBHAV GAUTAM CHOWDHARY has served on the board of Sanstar Biopolymers Limited for a period of 13 years and SHREYANS GAUTAM CHOWDHARY has served on the board of Sanstar Biopolymers Limited for a period of 13 years. 

Financially, Sanstar revenue jumped from ₹5,047.67 Millions in FY22 to ₹12,096.68 Millions in FY23 and currently at ₹10,816.83 Millions in FY24. Similarly, EBITDA increased from ₹397.20 Millions in FY22 to ₹724.47 Millions in FY23 and currently at ₹981.41 Millions in FY24. The PAT also increased from ₹159.21 Millions in FY22 to ₹418.83 Millions in FY23 and currently at ₹667.67 Millions in FY24. This indicates a steady financial performance.

For the Sanstar IPO, the company is issuing shares at a pre-issue EPS of ₹4.75 and a post-issue EPS of ₹3.66. The pre-issue P/E ratio is 20x, while the post-issue P/E ratio is 25.95x against the industry P/E ratio of 23x. The company's ROCE for FY24 is 24.43%, and ROE for FY24 is 30.92%. These metrics suggest that the IPO is fairly priced.

The Grey Market Premium (GMP) of Sanstar indicates potential listing gains of 25% to 30%. Given the company's financial performance and the valuation of the IPO, we recommend Investors to apply for listing gain or long term investment purposes.