The price band of the offer has been fixed at ₹635 to ₹662 per equity share of face value of ₹2 each.
The IPO will be a combination of fresh issue and offer for sale (OFS). The fresh issue size will be ₹1.5 bn while the OFS will be worth ₹8.7 bn. This will take the total issue size to ₹10.2 bn.
Tarsons Products is engaged in designing, developing, manufacturing and supplying a diverse range of quality lab-ware products used in laboratories across research organisations, academic institutes, pharmaceutical firms, diagnostics companies, and hospitals.
ICICI Securities, Edelweiss Financial Services, and SBI Capital Markets are the book running lead managers to the offer.
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Category-wise reserved portion
The public issue will include a reservation of 60,000 equity shares for employees.
Half of the issue size has been reserved for qualified institutional buyers (QIB), 15% for non-institutional investors, while 35% has been set aside for retail investors. Investors can bid for a minimum of 22 shares and in multiple thereof.
Use of IPO funds
Tarsons Products plans to utilise the net proceeds from the fresh issue for repayment or prepayment of its borrowings, funding a part of the capital expenditure for the new manufacturing facility at Panchla, West Bengal and for general corporate purposes.
About Tarsons Products
Tarsons Products is a leading Indian life sciences company with more than three decades of experience in the production and supply of labware products.
The company manufactures a range of quality labware products that helps advance scientific discovery and improve healthcare systems.
Its product portfolio is classified into three broad categories including consumables, reusables, and others. As of 31 March 2021, the company has a diversified product portfolio with over 1,700 stock keeping units (SKUs) across 300 products.
The company’s products are used in various laboratories across research organizations, academic institutes, pharmaceutical companies, contract research organisations (CRO), diagnostic companies, and hospitals. The company has many reputed institutes, medical labs, and hospitals as its key clients.
Company’s reach
Currently, the company has 5 manufacturing facilities located in West Bengal spread across approximately 20,000 square meters of area.
The company has a strong distribution network across India comprising of over 141 authorised distributors as of 31 March 2021 and supplies its products to more than 40 countries.
Financial snapshot of the company
Tarsons Products has witnessed good revenue growth in the last 3 years and 3 months.
It generated revenue of ₹2.3 bn in the financial year 2021. The company has good margins of over 21% in the last 3 years. These margins are improving year on year too.
It generated profits of ₹688.7 m for the fiscal year 2021.
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Here are the Positive Factors in this Company
>Tarsons Products is one of the India’s leading suppliers of life science products. The company has wide product portfolio and large addressable market of life science industry.
>The company has generated stable revenues in the last 3 years and has strong margin records in the last 3 years.
>Health-related segments have expanded post-pandemic, this augurs well for the company.
>The company enjoys strong sales and distribution network.
>For the time being, Tarsons Products does not have any listed comparable peer as per the offer documents.
Key Risk Factors
>The company intends to utilise the fresh proceeds for the civil works for building a new manufacturing facility in Panchla, West Bengal. They are yet to place orders for such civil construction.
>The firm imports over 75% of its raw materials. Any delay, interruption or reduction in supply of raw materials to manufacture its products can adversely affect its business.
>Tarsons Products manufacturing facilities are concentrated in West Bengal. Such geographical concentration can pose risk to its business.
>Many countries, including India has joined in the efforts to ban plastic products. In case of plastic products manufactured by the company are banned in India or any markets where the company exports its products can have a material and adverse effect on its business.
IPO market is booming in India. Will the trend continue?
The Indian stock market is still currently trading high and IPOs are attracting some wild valuations.
Given the abundant liquidity, the market regulator easing listing procedures and overall bullish sentiments, the IPO craze is understandable.
Data suggests that companies raised funds to the tune of US$ 4.6 bn from IPOs last year. The market believes this amount will be easily surpassed in 2021.
As companies line up to raise funds from the market amid high valuations, investors need to consider many factors before investing their money in an IPO.
If you are investing in an IPO, weigh in all the positive and negative factors affecting the company.
Take a close look at the company’s financials and valuations. It would give you a clear picture of what’s brewing.
Happy Investing!
This article is syndicated from Equitymaster.com
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