"Ahmedabad’s Sanstar to Invest ₹181 Crore from IPO Proceeds in Maharashtra Facility"

Sanstar, one of the largest manufacturers of maize-based specialty products, based in Ahmedabad, is gearing up to raise ₹510 crore through an initial public offering (IPO). Part of these funds, approximately ₹180 crore, will be allocated to expand its manufacturing facility located in Dhule, Maharashtra.

Sambhav Chowdhary, Joint Managing Director of Sanstar, elaborated, "We are in the process of enhancing our Dhule plant's capacity by an additional 1,000 tonnes per day (TPD), requiring an investment of ₹200 crore. We have already allocated ₹20 crore towards this expansion, with the remaining ₹180 crore to be sourced from the IPO. The expanded facility is expected to be operational by July 2025."

Sanstar currently serves as a crucial supplier to FMCG giants such as ITC, Hindustan Unilever, Capital Foods, and Godrej Agrovet. With existing plants in Kutch and Dhule, the company's total maize processing capacity stands at 1,100 TPD. Following the Dhule expansion, this capacity is set to increase to 2,100 TPD. The company specializes in manufacturing maize starch, dextrin, liquid glucose, high maltose maize syrup, maltodextrin, dextrose monohydrate, sorbitol, and gluten, catering to the food industry, pharmaceuticals, and animal nutrition sectors.

"We are predominantly export-oriented, generating revenues of ₹1,100 crore last fiscal year, with 35% stemming from exports," Chowdhary noted. Sanstar exports its products to 49 countries, with Malaysia, Kenya, and Vietnam among its top markets. "There is a rising demand in Western countries for vegan and plant-based food products, for which our industry supplies key raw materials," Chowdhary added.

Apart from the facility expansion, Sanstar plans to utilize ₹100 crore from the IPO proceeds to retire its existing debt, which currently amounts to ₹140 crore, primarily comprising a term loan and debt incurred for capital expansion. Of the total IPO corpus, ₹397 crore will be earmarked as fresh issue, while ₹113 crore will be offered for sale.

HBL