Plant-based speciality firm Sanstar gets Sebi's nod to float IPO

Plant-based speciality products company Sanstar Ltd has received Sebi's go-ahead to float an initial public offering, an update with the markets regulator showed on Tuesday.

The proposed initial public offering (IPO) comprises a fresh issue of 4 crore shares and an Offer For Sale (OFS) of up to 80 lakh shares by its promoters and promoter group selling shareholders, according to the draft red herring prospectus (DRHP).

According to market sources, the IPO size is expected to be Rs 425-500 crore.

Also, the company may consider a pre-IPO placement of up to 40 lakh equity shares. If such placement is completed, the fresh issue size will be reduced

The Ahmedabad-based company, which filed its draft IPO papers with Sebi in January this year, obtained its observations on April 30, as per the update.

In Sebi's parlance, obtaining observations means its go-ahead to float the public issue.

Going by the draft papers, proceeds from the fresh issue will be utilised to fund the capital expenditure requirement for the expansion of the company's Dhule facility, debt payment and general corporate purposes.

Sanstar is one of the major manufacturers of plant-based speciality products and ingredient solutions in India. The company's specialty products and ingredients add taste, texture, nutrients and increased functionality to foods as ingredients, thickening agents, stabilizers, 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 equity shares of the company are proposed to be listed on the BSE and NSE.

Pantomath Capital Advisors is the sole book-running lead manager for the IPO.