Sanstar Limited’s IPO opened to the public on 19th July 2024 and will remain available for subscription until 23rd July 2024. The company has set the IPO price band between ₹90 and ₹95 per equity share. This book build issue aims to raise ₹510.15 crore, with ₹397.10 crore from fresh shares and ₹113.05 crore through the Offer for Sale (OFS) route. The IPO has seen robust demand from investors, reflecting confidence in the company’s growth prospects.
On the first day of bidding, the IPO was subscribed 4.16 times, signaling strong interest from the market. This enthusiasm has also been mirrored in the grey market, where the shares of Sanstar Limited are trading at a premium. The GMP for Sanstar Limited’s IPO today is ₹46, up from ₹42 on Friday. This increase in GMP, despite overall weak market sentiments, underscores the high demand and positive outlook for the company’s shares.
By 11:30 AM on the second day of bidding, the IPO was subscribed 7.64 times. The retail portion saw a subscription of 7.38 times, while the NII segment was subscribed 18.27 times. The QIB portion, however, saw a more modest subscription rate of 0.13 times. The strong subscription rates, particularly among retail and NII investors, indicate widespread confidence in the company’s future performance.
Sanstar Limited’s IPO has received favorable reviews from various brokerage firms. Master Capital Service has given the IPO a ‘subscribe‘ rating, noting that the funds raised will be used to pay off debt, strengthen the balance sheet, and expand production capacity. This expansion is expected to nearly double the company’s current capacity, which is already operating at 90% capacity. The additional capacity is anticipated to support significant growth, making the IPO an attractive long-term investment.
BP Equities has also endorsed the IPO with a ‘subscribe‘ rating, citing the fair valuation of the issue at a P/E of 20.0x on the upper price band based on FY24 earnings. Other brokerage firms such as Adroit Financial Services, Arihant Capital, Canara Bank Securities, DR Choksey, Marwadi Shares and Finance, Nirmal Bank, Reliance Securities, Sushil Finance, and Ventura Securities have similarly recommended subscribing to the IPO, highlighting the company’s promising growth trajectory.
Sanstar Limited is expected to utilize the funds from the IPO to enhance its production capabilities and pay down existing debt, which will bolster its financial health and support future growth initiatives. The company’s strong performance in the grey market and the high subscription rates reflect investor optimism about these plans.
The IPO will close on 23rd July 2024, with the allotment date likely set for 24th July 2024. Following the ‘T+3’ listing rule, the shares are expected to be listed on the BSE and NSE on 26th July 2024.
