Sanstar IPO Day 3 Subscription / GMP : Investors are liking the IPO of Sunstar Limited, a company that makes plant based specialty products. Today, on the third day of the issue, till 4:50 pm, it has been subscribed about 83 times. It is expected to get high subscription by the end of the day today. At the same time, on the third day of the IPO, its craze has also reduced in the gray market. Today, 23 July 2024 is the last day to subscribe to this IPO. The brokerage has listed 5 reasons due to which you can invest in it. The size of the IPO is 510 crores, while the company has fixed the price band at Rs 90-95 per share.
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Subscription Status on Day 3
Sunstar’s IPO has been subscribed nearly 83 times till 4:50 pm today on its third day. 35 percent of the IPO is reserved for retail investors and this share has been subscribed 24.10 times so far. Whereas 50 percent of the share is reserved for qualified institutional buyers i.e. QIB and it has been subscribed 145.68 times so far. Whereas 15 percent of the share is reserved for non-institutional buyers i.e. NII and it has been subscribed 136.42 times so far.
GMP drops to 32%
The craze for Sunstar’s IPO in the grey market has subsided somewhat. The company’s unlisted stock is at a premium of Rs 30 in the grey market. This is a 32 per cent premium to the upper price band of Rs 95. If this indication is correct, the stock may be listed at Rs 125 as compared to the IPO price of Rs 95.
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5 big reasons to subscribe to IPO
Brokerage house BP Equities has advised to subscribe to Sanstar’s IPO.
1. The brokerage says that the company has the 5th largest capacity in the Indian maize-based specialty products and ingredients solutions industry. It is on track to expand by an additional 1000 tonnes per day at its Dhule facility. Post expansion, it is projected to be the third largest manufacturer of maize-based specialty products and ingredients solutions in India.
2. To meet the growing demand for products from existing customers and to meet the requirements of new customers, the Company intends to expand its manufacturing capabilities for existing products.
3. The company has established long term relationships and served over 525 customers with 162 new customers added during FY 2024.
4. The Company plans to expand its customer base by leveraging relationships with existing customers in India and globally, as well as developing new relationships.
5. The company has demonstrated consistent growth in terms of revenue and profitability at a CAGR of 45.4 per cent and 104.8 per cent between FY 2022-24. The company has experienced consistent growth in various financial indicators including revenue, profitability, cash flow and returns and consistent improvement in balance sheet position in the last three financial years.
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what the company does
This Ahmedabad-based company manufactures liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, indigenous maize starch, refined maize starch, gluten, fiber and protein among other products. The company has two production units in Kutch in Gujarat and Dhule in Maharashtra. As of May 18, 2024, the company’s total production capacity was 3,63,000 tonnes per annum (1,100 tonnes per day).
There is some risk with the company
The company has had negative cash flows in the past periods and may continue to have negative cash flows in the future. It is highly dependent on its top 10 suppliers for raw materials and work in progress used in its manufacturing process. The cost of raw materials used in its manufacturing process is subject to volatility.
(Disclaimer: Investing or selling stocks is advised by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert advice before investing.)