Sanstar IPO Listing Today : The IPO of Sunstar Limited, a plant based specialty product manufacturer, has made a weaker entry in the stock market than expected. Despite the boom in the market, the company’s stock has made a sluggish debut. Sunstar’s stock was listed on the BSE at Rs 106, while the IPO price was Rs 95. In this sense, those who were allotted shares in this IPO have got a 12 percent return on listing. The IPO received strong subscription from investors, while experts and brokerage houses were also giving their positive opinion on it. The question is whether the shares should be sold after earning profit on listing or should be held for a long period.
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The IPO received a strong response
Sunstar’s IPO received a strong response from investors. This IPO was subscribed about 83 times overall. 35% of the IPO was reserved for retail investors and this share was subscribed 24.23 times. 50% of the IPO was reserved for qualified institutional buyers i.e. QIB and this share was subscribed 145.68 times overall. 15% of the IPO was reserved for non-institutional buyers i.e. NII and this share was subscribed 136.49 times overall.
5 positive facts about the company
1. Brokerage house BP Equities says 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. After the 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).
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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.)
