Sanstar Limited has informed the Exchange about Credit Rating- Revision
SANSTAR · price
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Awaiting price reaction for this filing.
CARE Ratings has upgraded Sanstar Limited's credit ratings for its bank facilities totaling ₹113.75 crore. The long-term/short-term bank facilities (₹95 crore) rating moved from CARE BBB; Stable / CARE A3+ to CARE BBB+; Stable / CARE A2, while short-term bank facilities (₹18.75 crore) improved from CARE A3+ to CARE A2. The upgrade is driven by the company's improved net worth base following its FY24 IPO (net worth jumped from ₹217.51 crore to ₹618.08 crore), better capital structure, and comfortable debt coverage indicators. CARE also cited the company's experienced promoters, established track record in the maize starch industry, diversified clientele, and stable profitability (PBILDT margin of 9.60% in FY24) as supporting factors. The outlook remains Stable, with key concerns being project execution risk for a ₹201.55 crore capacity expansion (from 1,100 TPD to 2,100 TPD) and exposure to volatile maize prices.
This is a positive development for shareholders, reflecting improved financial health and stronger creditworthiness. A rating upgrade typically reduces borrowing costs, enhances investor confidence, and signals the company's growing financial strength post-IPO, which could support the stock's valuation.