Sanstar listing: Shares debut at 15% premium on NSE at Rs 109/ share; here is what investors should do now

Sanstar IPO against expectations made a decent listing at a 12 per cent premium on the BSE at Rs 106.4. On the NSE, the stock listed at Rs 109, a premium of around 15 per cent over the issue price of Rs 95. 

The Rs 510.1 crore which ran between July 19 to July 23 received overwhelming response during the subscription period with overall subscription to the tune of 83 times. The QIB category baded for the maximum subscription of 145.7 times, while the retail subscription was at just over 24 times.

Sanstar shares listing: What should investors do now?

Prashanth Tapse, Senior VP (Research), Mehta Equities post listing of the shares believes that

Prashanth Tapse, Senior VP (Research), Mehta Equities is of the belief that even as the market mood remains upbeat we still continue to recommend allotted investors to book profits on listing day. We are not comfortable on the valuations which were slightly on the expensive side when compared to other listed peers, he added.

Shivani Nyati, Head of Wealth, Swastika Investmart said the stock made a solid debut on the stock market, listing at Rs. 109 per share, a 14.74 per cent premium over its issue price of Rs. 95. While this performance is positive, it falls short of pre-listing expectations, likely influenced by the broader market volatility following the budget announcement.

Despite the market headwinds, the IPO received an overwhelming response, with an 82.99 times subscription, reflecting strong investor interest in the company's growth prospects. Sanstar's diverse product range, strategic manufacturing facilities, and large customer base have contributed to this positive sentiment.

However, the company's exposure to raw material price fluctuations, global market volatility, and intense competition necessitates careful monitoring.

Sanstar's listing, while not reaching the initial hype, is a positive development. The company's strong fundamentals and investor interest provide a solid foundation for future growth. Investors may hold their position at the issue price, advises Nyati.

Other things to note about Sanstar IPO

Proceeds from the fresh issue to the tune of Rs 181.55 crore will be utilised to fund the capital expenditure requirement for the expansion of the company's Dhule facility, Rs 100 crore for debt payment and a portion will also be used for general corporate purposes.

Sanstar is one of the major manufacturers of plant-based speciality products and ingredient solutions in the country.

The company's speciality products and ingredients add taste, texture, nutrients and increased functionality to foods as ingredients, thickening agents, stabilisers and sweeteners, among others.

It has an installed capacity of 1,100 tonnes per day through its two manufacturing facilities at Dhule in Maharashtra and Kutch in Gujarat.

The company exports its products to 49 countries across Asia, Africa, the Middle East, the Americas, Europe, and Oceania and has established its presence across India, distributing its products to 22 states.