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Ahmedabad-based Sanstar, which specialises in plant-based products, has filed preliminary papers with the Securities and Exchange Board of India (SEBI) for raising funds through an initial public offering (IPO). Sources told Moneycontrol that the issue size may be in the range of Rs 400-500 crore.
The IPO will be a mix of fresh issue of four crore shares and an offer-for-sale (OFS) of 80 lakh shares by the Chowdhary family.
The company may also consider raising funds through private placement, rights issue, or preferential issue of up to 40 lakh equity shares before filing the red herring prospectus. If the company manages to raise funds in pre-IPO placement, the fresh issue size will be reduced.
Sanstar , which manufactures plant-based speciality products and ingredient solutions for food, animal nutrition and other industrial applications, is going to spend Rs 181.55 crore on the expansion of its Dhule facility and repay debt of Rs 100 crore. The company’s outstanding borrowings stood at Rs 120.52 crore as of December 15.
The remaining fresh issue money will be set aside for general corporate purposes.
With the installed capacity of 3.63 lakh tonnes per annum, Sanstar is the third largest manufacturer of maize-based speciality products and ingredient solutions in India. It has two manufacturing facilities at Dhule in Maharashtra and Kutch in Gujarat.
Sanstar reported net profit of Rs 40.74 crore for the year ended March FY23, up from Rs 15.92 crore in the previous year. Revenue rose to Rs 759.7 crore, up from Rs 504.4 crore. For the six months period ended September FY24, it registered net profit of Rs 21.82 crore on revenue of Rs 375.4 crore.
