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The three-day initial public offering (IPO) of life sciences firm Tarsons Products opened on Monday and the issue concluded today. The IPO price band has been set at 635-662 a share, and at the upper end of the price band, the public issue is expected to fetch 1,024 crore. Tarsons Products has raised 306 crore from anchor investors ahead of its public issue.

At the end of the day 3 of bidding, the issue was oversubscribed by 77 times, led by huge demand from Non Institutional Investors (NIIs). The retail portion got booked 10 times, while NIIs bid 184 and QIBs 115 times.

Tarsons Products' initial share sale comprises fresh issuance of equity shares worth 150 crore and an offer for sale of 1.32 crore equity shares by promoters and an investor. 

As per market observers, Tarsons Products shares premium (GMP) have surged in the grey market to 210. The company's shares are expected to list on stock exchangs BSE and NSE on November 26, 2021.

"The company has high profit margins & also reported RoNW of 28.19% in FY21, however valuation is on the higher side, hence we give this IPO a "Subscribe (Long Term)" rating," said Anand Rathi in a note.

The proceeds from the fresh issue will be utilised towards paying debt, funding a part of the capital expenditure for the new manufacturing facility at Panchla in West Bengal and general corporate purposes.

“With respect to its performance in FY20, its business and profitability increased drastically in the pandemic year. However, we believe that the current business growth and profitability expansion is not sustainable. There is a respectable import market for the company to capture and also a huge export opportunity arising from the 'China plus one' strategy, in case the globe adopts this strategy in the post-Covid period. Thus considering the future growth outlook and the demanded premium valuation, we assign a ‘Subscribe with Caution’ rating for the issue," said Choice Broking.

Tarsons Products is engaged in designing, developing, manufacturing and supplying a diverse range of quality labware products used in laboratories across research organisations, academic institutes, pharmaceutical firms, diagnostics companies and hospitals. It manufactures a range of quality labware products that help advance scientific discovery and improve healthcare.

“Tarsons’ is well placed to capture the growth arising from shift from glassware to plastic ware, growth for end users and continued gains for domestic manufacturers among others. Tarsons has good ROE aided by hi margins which can sustain with growing scale of operations.. We believe the valuations are fair. We have a ‘Subscribe’ rating on the issue," said Amarjeet Maurya - AVP - Mid Caps, Angel One Ltd. 

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