{"id":21171,"date":"2024-07-18T10:35:09","date_gmt":"2024-07-18T05:05:09","guid":{"rendered":"https:\/\/www.moneyworks4me.com\/investmentshastra\/?p=21171"},"modified":"2024-07-18T10:35:09","modified_gmt":"2024-07-18T05:05:09","slug":"sanstar-ipo-review","status":"publish","type":"post","link":"https:\/\/www.moneyworks4me.com\/investmentshastra\/sanstar-ipo-review\/","title":{"rendered":"Sanstar IPO Review"},"content":{"rendered":"
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Sanstar Ltd IPO Details:<\/strong><\/h2>\n

Opening Date:<\/strong> July 19, 2024<\/p>\n

Closing Date:<\/strong> July 23, 2024<\/p>\n

Listing:<\/strong> BSE and NSE<\/p>\n

Number of Shares:<\/strong> 5.37 Cr shares<\/p>\n

Face Value:<\/strong> Rs 2 per share<\/p>\n

Price Band:<\/strong> Rs 90-95 per equity share<\/p>\n

Issue Size:<\/strong> Rs 510.15 Cr<\/p>\n

Recommendation: Avoid<\/strong><\/p>\n<\/div>\n

About Sanstar:<\/u><\/h2>\n

Sanstar Ltd<\/a> is a major manufacturer of plant based speciality products and ingredient solutions in India for food, animal nutrition and other industrial applications. Their products include liquid glucose, maize starches and co-products such as germs, gluten, fibre and enriched protein. These products and ingredient solutions add taste, texture, nutrients to foods such as bakery products, and are also used in animal nutrition products along with industrial products such as disintegrants, supplements and coasting agents.<\/p>\n

Sanstar has a production capacity of 3,63,000 tons per annum (1,100 tons per day) and is the 5th<\/sup> largest manufacturer of Maize (Makka) based speciality products and ingredient solutions in India with the company\u2019s products being sold in 22 states in the country.<\/p>\n

Industry Overview:  <\/u><\/strong><\/p>\n

Maize Starch: It is a plant \u2013 based ingredient derived from wet milling process of Maize (Makka). Sources of starch are cereal grain seeds, tubers, roots and legume fruits, leaves and seeds. Commercially derived starch is mainly Tapioca, wheat, potatoes, rice and Maize, with Maize being the most popular one.<\/p>\n

The Maize value chain<\/strong><\/p>\n

\"maize<\/a><\/p>\n

SBS- Starch based sugar<\/p>\n

The global starch Maize starch market is expected to grow at a CAGR of ~4.25% between CY23 and CY29.In CY23, this market was valued at US$45 billion and 84.5 Million tons in value and volume terms respectively.<\/p>\n

In India, 1\/3rd<\/sup> of production of total maize produced in India is utilized for human consumption with ~10-15% being utilized for starch production. Around ~50-55% is consumed for animal and poultry production.<\/p>\n

Starch is used for various culinary, household and industrial purpose, with India being among the top 10 maize producing countries in the world. The maize starch market is anticipated to grow at a CAGR of 5.12% during the period between 2023-2029. This market was valued at US$3.1 billion and 7.27 Million tons in value and volume terms respectively.<\/p>\n

\"Indian<\/a><\/p>\n

Global Opportunities<\/u>:<\/strong> India is the largest global exporter of maize starch, exporting ~4.78 lakh tons in 2022. Export volumes have increased by 15% from 2018 to 2022. India is also among the top 10 global exporters of sweeteners like liquid glucose. Local raw material availability, capable processing sector, and good quality at lower costs are increasing the global demand for Indian maize-based specialty products and ingredients.<\/p>\n

\"maize<\/a><\/p>\n

Global Maize based speciality products & ingredients Solutions market<\/p>\n

\"global<\/a><\/p>\n

Indian Maize based speciality products & ingredients solutions market<\/p>\n

\"Indian<\/a><\/p>\n

The Global Native Starch and Co-Products Industry<\/strong><\/p>\n

This industry was expected to be valued at US$ 29 billion in CY23 with a projected CAGR of 3.78% from 2023-2029. This market grew at a CAGR of 2.78% from 2019-2023. The higher projected growth is expected to come from the Food & Beverages, textiles, paper, cosmetics, adhesives and pharma industries and also from the governmental impetus to increase the productivity of maize. The projected volume by 2029 is expected to be 74.2 million tons. The largest use of native starch is in the food and beverages industry which accounted for 70.1% of the total volumes at ~42 million tons.<\/p>\n

The products which remain after separating the maize starch slurry during the wet milling process are called as co-products. These include products such as Germ, Gluten, Fibre and Maize steep liquor. The current global market for such co-products stands at US$6.9 billion and is expected to reach US$8.5 billion by CY2029.<\/p>\n

The Indian Native Maize starch Market:<\/strong><\/p>\n

The Indian market was estimated in 2023 to be valued at US$1.9 billion with volume 4.87 million tons. This market is forecasted to grow at CAGR of 4.56% till 2029. This market grew significantly due to new plants being opened with capacity exceeding 600 tons a day. Many players in this market are undergoing capacity expansions to cater to increasing demand. The viable capacity for maize starch ranges from 600-800 tons a day. India\u2019s installed starch capacity is estimated to range from 5.8 \u2013 6.5 MTPA, with the industry experiencing a surge in expansion activity. India is the largest exporter of starch with a global share of 14.3% in CY2022.<\/p>\n

The end user industries of the Indian Native Maize Starch Market is mainly dominated by the Food & Beverage Industry, which consumes around 30% of the production, followed by 23.4% from the paper industry and 16.8% from textile industry.  Adhesive, Animal feed, Pharmaceutical and Chemical industries contribute the remaining volumes.<\/p>\n

Indian Co-Products Market:<\/strong><\/p>\n

The co products market in India was estimated to be approx. 1.12 million tons in CY2023 valued at US$500 mil. This demand in India is driven mainly by the poultry industry.<\/p>\n

\"coproducts<\/a><\/p>\n

The Modified Starch Industry:<\/strong><\/p>\n

Modified starches overcome the shortcomings of native starches such as loss of viscosity and thickening power when being cooked or stored.<\/p>\n

The global modified starch market was estimated to be worth US$15.6 billion in 2023 and is projected to grow at a CAGR of 5.11% from CY2023-2029.<\/p>\n

In the past, trade barriers had largely kept food products such as modified starch markets regional, which are now being reduced due to trade liberalizations and agricultural reforms.<\/p>\n

This industry produces various types of modified starches, which includes yellow Dextrin, White Dextrin, oxidized Starch, Catonic Starch and Pregel Starch.<\/p>\n

Business Segments:<\/u><\/strong><\/p>\n

The company manufacturers various types of Maize (Makka in Hindi) starches, derivatives and its co-products<\/p>\n

\"types<\/a><\/p>\n

The company\u2019s main products in the Maize starch line are:<\/p>\n

Native maize Starch: It is powder obtained from the starchy part of maize and is mainly used in foods and pharmaceuticals industry<\/p>\n

Modified Maize Starch:  Produced by treating native starch to change its properties and is mainly used in Pharma and Paper industries.<\/p>\n

The company also sells co-products from Maize which are:<\/p>\n