Shares of Sanstar have seen a sharp correction in the grey market ahead of its listing. The stock is set to make its Dalal Street debut on Friday, July 26 and its grey market premium (GMP) has tumbled sharply in the last 24 hours. However, despite this correction, the stock may deliver a healthy listing pop to the investors.
Ahead of its listing, shares of Sanstar were commanding a grey market premium (GMP) of 26 per share, suggesting a listing pop of around 27-28 per cent for the investors. However, the premium in the unofficial market stood around Rs 35 apiece about 24 hours earlier.
Sanstar's issue appears to be priced aggressively when considering the FY24 earnings, said Amit Goel, Co-Founder & Chief Global Strategist at Pace 360 "We expect a listing at around Rs 125-130 per share, resulting in a listing gain of around 33," he said.
"With rising demand for its products, the management is confident of improving the trends reported and its performance post expanded capacities. Post listing, we recommend investors should book profits," Goel suggested.
The IPO of Sanstar ran between July 19 and July 23. The company had offered its shares in the fixed price band of Rs 90-95 per share with a lot size of 150 shares. The company raised a total of Rs 510.15 crore from its follow-on offering, which was entirely a fresh share sale of up to 397.10 equity shares and an offer-for-sale (OFS) up to 1.19 crore equity shares.
The issue was overall subscribed a total of 82.99 times. The quota for qualified institutional bidders (QIBs) was booked a solid 145.68 times The quota for non-institutional investors was subscribed a whopping 136.50. The portions reserved for retail investors saw bidding for only 24.23 times during the three-day bidding process.
Sanstar shares may debut on the bourses on Friday as the shares get listed at a premium of around 32 per cent over the issue price. Sanstar has established long-term relationships and serves over 525 customers, with 162 new customers during FY24, said Prathamesh Masdekar, Research Analyst at StoxBox.
"We have a positive view of the company and advise the participants who have been allocated to the issue to hold the shares from a medium- to long-term perspective," he said.
Sanstar is a manufacturer of specialty plant-based products and ingredient solutions for food, pet food and other industrial products in India. Its product portfolio includes liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native maize starches, modified maize starches, and by-products such as germ, gluten, fiber and fortified proteins.
Brokerage firms are mostly positive on the issue suggesting investors to subscribe to it for a long term. Pantomath Capital Advisors is the sole book running lead manager of the Sanstar IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE.