Tarsons Products makes a decent debut, lists at 6% premium to issue price

Tarsons Products (TPL) made a decent stock market debut on the bourses as the stock listed at Rs 700, a 6 per cent premium to issue price of Rs 662 on the BSE on Friday. On the National Stock Exchange (NSE), the stock opened at Rs 682, a 3 per cent higher against its issue price.

Post listing, the stock rallied up to Rs 808, a 22 per cent premium to issue price on the BSE. At 10:04 am; the stock was up 14 per cent at Rs 798, as compared to 1.6 per cent decline in the S&P BSE Sensex.

The initial public offer (IPO) of TPL had received healthy response from all types of investors with issue was subscribed 77.49 times. The retail individual investor’s category was subscribed 10.56 times. The qualified institutional buyers (QIBs) category was subscribed 115.77 times. The non institutional investor’s category was subscribed 184.58 times.

TPL is an Indian labware company engaged in the designing, development, manufacturing and marketing of ‘consumables’, ‘reusables’ and ‘others’ including benchtop equipment, used in various laboratories across research organizations, academia institutes, pharmaceutical companies, Contract Research Organizations (“CROs”), Diagnostic companies and hospitals.

TPL is well placed to benefit from growing life sciences industry trends given its strong market share of around 9-12 per cent in India, quality products and strong brand recognition. Moreover, it provides a diverse range of labware products across varied customer segments. It has a wide geographic reach through its pan India sales and distribution network, analyst at Religare Broking said in IPO note.

Going forward, it intends to expand its product portfolio, enhance its manufacturing capacities, and increase its global footprint. It also aims to continue to focus on maintaining operational efficiency and profitability, the brokerage firm said.

“Tarsons Products has strong financials where margins are very impressive and it also has well-experienced management. The company has a strong cash flow and it is likely to become debt-free post IPO however the valuations look expensive therefore aggressive investors with a long-term view can hold this stock while those who were playing for listing gain should book profit,” said Aayush Agrawal, Sr. Research Analyst - Merchant Banking, Swastika Investmart.