The initial public offering (IPO) of Sanstar, which attempted to raise over Rs 500 crore debuted with a dull listing of merely 14.7 per cent premium. The IPO listed at Rs 109 on the National Stock Exchange (NSE) against the issue price of Rs 95.
The Rs 510.15 crore IPO consisted of fresh issues of up to Rs 397.10 crore and an offer-for-sale (OFS) worth Rs 113.05 crore by promoter and investor selling shareholders with the price band for the issue being fixed at Rs 90 to 95.
The total subscription of the issue stood at 82.99 times, while the retail subscription contributed 24.23 times and the qualified institution stood at 145.68 times subscription.
Pantomath Capital Advisors was the book running lead managers, while Link Intime India was the registrar to the offer.
IPO Objectives
The proceeds of Rs 397.10 crore from the fresh issue will be utilised for prepayment or scheduled repayment of a portion of certain outstanding borrowings availed by the company and general corporate purposes.
Additionally, the firm will also get benefits on listing in the public market which will enhance the brand’s visibility and provide liquidity to the shareholders.
Experts Advice
“Sanstar didn’t meet pre-listing expectations due to market volatility in the Indian markets. Post listing, we recommend that investors book profits in the short term. Long-term investors are advised to hold considering the strong fundamentals of the company,” said Amit Goel, Co-Founder and Chief Global Strategist, Pace 360.
“Sanstar's financial performance is driven by its established market position in the industry, increasing global footprint, high entry barriers, expanded manufacturing capacities to capture additional market share, and long-lasting customer relationships, which enable it to tap the significant opportunities in existing and future products Hence, we advise the market participants to hold the shares from a medium to long-term perspective,” said Prathamesh Masdekar, Research Analyst, StoxBox.
Firm’s Financials
The firm registered revenue of Rs 1,081 crore in FY24, compared to Rs 1,209 crore in FY23.
However, the firm’s profit after tax (PAT) increased to Rs 66.77 crore in FY23 compared to Rs 41.81 crore in FY22.
Overall, revenue decreased by 10.58 per cent, whereas PAT climbed by 59.71 per cent.
