IPO (Sanstar Limited) : GMP jumps after strong subscription status. Should Apply or not?

Sanstar Limited IPO: The initial public offering (IPO) of Sanstar Limited opened on 19th July 2024, i.e. on Friday last week. The public issue will remain open until 23rd July 2024, i.e., Tuesday next week. The company has fixed the Sanstar Limited IPO price band at ₹90 to ₹95 per equity share. The book build issue is proposed for listing on BSE and NSE, aiming to raise ₹510.15 crore. Out of these ₹510.15 crore, the company seeks to raise 397.10 crore by issuing fresh shares, whereas the remaining ₹113.05 crore is reserved for the OFS (Offer for Sale) route. The public issue received a strong response from the Indian primary market investors.

According to the Sanstar Limited IPO subscription status after day one of bidding, the public issue was booked 4.16 times. Meanwhile, shares of Sanstar Limited have gone highly bullish in the grey market after day one of bidding. According to stock market observers, shares of Sanstar Limited are available at a premium of ₹46 on the grey market today.

Sanstar Limited IPO GMP today

Sanstar Limited IPO GMP (grey market premium) today is ₹46, which is ₹4 higher than Friday’s Sanstar Limited IPO GMP of ₹42, say market observers. Market observers noted that Sanstar Limited IPO GMP today has risen despite weak sentiments on Dalal Street, which is praiseworthy. They said the rise in Sanstar Limited IPO GMP can be attributed to the robust Sanstar Limited IPO subscription status after day one of bidding. They said that two days of bidding are still left, and the book build issue is expected to reap the benefit of the small size.

Sanstar Limited IPO subscription status

After the first day of bidding, the public issue was booked 4.16 times, the retail portion of the book build issue was booked 4.07 times, the NII segment was subscribed 9.85 times, and the QIB portion was filled 0.05 times.

Sanstar Limited IPO review

Giving a ‘subscribe’ tag to Sanstar Limited IPO, Master Capital Service says, “Sanstar is looking to pay off its debt, strengthen its balance, and invest into building additional capacity to fuel their growth. After the proposed expansion, the capacity will almost double from current levels, creating huge headroom for growth. The current capacity is already 90% filled, and the capex for expansion has already started. The valuation of the IPO is at par with the listed peers, but given the growth prospects, we advise you to subscribe to the IPO while keeping a long-term view.”

BP Equities has also given the book build issue a ‘subscribe’ tag, saying, “The issue is valued at a P/E of 20.0x on the upper price band based on FY24 earnings, which is deemed fair. Therefore, we recommend a SUBSCRIBE rating for the issue.”

Other leading brokerages, such as Adroit Financial Services, Arihant Capital, Canara Bank Securities, DR Choksey, Marwadi Shares and Finance, Nirmal Bank, Reliance Securities, Sushil Finance, and Ventura Securities, have also given this book build issue a ‘subscribe’ tag.

Sanstar Limited IPO details

Bidding for the public issue will end on 23rd July 2024 i.e. on Tuesday next week. Sanstar Limited IPO allotment date is most likely on 24th July 2024. In the wake of the ‘T+3’ listing rule, Sanstar Limited IPO listing date is most likely on 26th July 2024 i.e. on Friday next week.

Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.