TARSONS PRODUCTS IPO

IPO Details:

Price Band: 635-662

Cutoff Price: 662

About Company:

Tarson is an Indian LabWare company engaged in designing, development, manufacturing and marketing of ‘consumables’, ‘reusable’ and ‘others’ including bench-top equipment, used in various laboratories across research organizations, academia institutes, pharmaceutical companies CROs, diagnostic companies and hospitals. Company is also engaged in the manufacturing of a range of quality LabWare products which helps scientific discovery and improve healthcare. Tarson currently operate through five manufacturing facilities in West Bengal and cater to a diverse range of end customers across various sectors which include research organizations, academic institutions, pharmaceutical companies, CROs, academic institutions, diagnostic companies and hospitals. Company distribute their products to these end customers on a pan-India basis through authorised distributors.

Competitive Strengths:

1. Leading Indian supplier to life sciences sector with strong brand recognition and quality products.

2. We provide a diverse range of LabWare products across varied customer segments.

3. We operate in an industry which has a large addressable market with longstanding relationships with key end customers.

4. Well-equipped and automated manufacturing facilities.

5. Wide geographic reach throughout pan India sales and distribution network.

6. Experienced Promoter backed by a strong management team.

Strategies:

1. Strengthening a foothold in existing markets and expanding our product portfolio.

2. Enhancing manufacturing capacities in existing product categories to leverage industry growth drivers.

3. Increasing global footprint in the overseas market.

4. Continue to focus on maintaining operational efficiency and profitability,

Financial Performance:

Revenue is growing and company is net profitable. Company's Net Profit and EPS is also increasing. With EPS of 13.43, company cutoff price is at P/E of 49.3.

Objects of the Issue:

The Net Proceeds from the Issue are proposed to be utilised in the following manner:

1. Offer for Sale

2. Repayment/prepayment of certain borrowings

3. Funding capital expenditure for the Proposed Expansion

Competitors Comparison:

Tarson Products seem undervalued in terms of P/E ratio but it is overvalued in terms of P/B ratio. Valuation seems to be high as of now for Tarson.

Grey Market Premium:

Our view: GMP of the IPO is good and the company is also profitable. Valuation seems to be high. I will subscribe to this IPO only for listing gains.

Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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