The initial public offering (IPO) of Tarsons Products Ltd has opened for subscription already amid a moderate demand from investors. At the end of Day 1, the issue of the Indian labware company has been fully subscribed. The shares have been subscribed 1.09 times on the day, receiving bids for 1.18 crore equity shares out of 1.08 crore shares up for sale. The issue, which concludes on November 17, Wednesday, is expected to raise Rs 1,024 crore in the end. The price band has been fixed at Rs 635-662 a piece. The offer size has been cut from 1.54 crore equity shares to 1.18 crore equity shares as the company raised Rs 305.96 crore from anchor investors on the preceding day to the offer.
Tarsons Products IPO closes tomorrow. Meanwhile, let’s take a look at all the key details of the offer.
Tarsons Products IPO Subscription Status
On Monday, that is the day when the offer opened, the portion reserved for retail buyers was subscribed 2.12 times, while non institutional buyers placed bids for 17 per cent of the shares set aside for them. On the other hand, employees put in bids for 24,332 shares out of the 60,000 units reserved for them. Qualified institutional buyers were yet to put in their bids at the end of Day 1.
Tarsons Products IPO GMP Today
Tarsons Products shares are trading at Rs 862 at the grey market on Tuesday. This is a Rs 200 increase from its upper price band of Rs 662 per share, up by over 130 per cent. This indicates a strong listing of the shares at the BSE and NSE later this month.
Tarsons Products IPO Objectives
Proceeds from the Tarson Products IPO will be used in three ways by the company — a) For repayment or prepayment of all or certain of its borrowings, b) For funding a part of the capital expenditure for the new manufacturing facility at Panchla, West Bengal, and c) For general corporate purposes. The company will not receive any proceeds from the Offer for Sale.
ICICI Securities, Edelweiss Financial Services and SBI Capital Markets are the book running managers to the issue. On the other hand, KFintech Private Limited will act as the registrar.
Key Strengths
Tarsons Products Limited, established in 1983, is a leading g Indian supplier to life sciences sector with strong brand recognition and quality products. It is among the top three labware manufacturing companies in India, providing an extensive range of laboratory consumables, reusables and ‘others’ product categories. Moreover, the company operates in an industry which has a large addressable market with long-standing relationships with key end customers. According to the Anand Rathi Group, Tarsons Procuts Limited’s manufacturing capabilities are vertically integrated with design and development being carried out in-house. All its manufacturing facilities have injection moulding and extrusion blow moulding machines which are well complemented with advanced automation technologies. Its manufacturing processes are automated with use of robotics and certain other technologies.
Should You Subscribe?
Anand Rathi Group: At the upper end of the IPO price band, Tarsons Products Ltd. is offered at P/E of 40.7x its TTM earnings, with a market capitalization of Rs 35,222 million.
The company is a leading supplier to life sciences sector, with diverse range of labware products across varied customer segments in an industry which has large addressable market. The company has high profit margins and also reported RoNW of 28.19 per cent in FY21, however valuation is on the higher side, hence we give this IPO a “Subscribe (Long Term)” rating.
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