The initial public offering of Tarsons Products continued to see good demand from investors, with the issue getting subscribed 3.58 times on November 16, the second day of bidding. The offer has garnered bids for 3.88 crore equity shares against the IPO size of 1.08 crore units.
The portion set aside for retail investors has been subscribed 4.74 times and that of non-institutional investors has seen 3.98 times subscription.
Employees have put in bids 1.08 times the reserved portion, while qualified institutional buyers bought shares 1.30 times the portion set aside for them.
The labware supplier to life sciences sector reserved 60,000 equity shares for its employees who will get these shares at a discount of Rs 61 a share to the final offer price.
The price band for the offer, which closes on November 17, has been fixed at Rs 635-662 apiece.
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Tarsons Products intends to raise Rs 1,023.84 crore through its IPO that comprises fresh issuance of Rs 150 crore and the remaining portion is an offer-for-sale by shareholders. The company mopped up Rs 305.96 crore from anchor investors on November 12.
The fresh issue proceeds are going to be utilised for repaying debt and capital expenditure for the new manufacturing facility at Panchla in West Bengal.
“The company is bringing the issue at a price band of Rs 635-662 per share at a P/E multiple of 34 on post-issue FY21 EPS. The company being a supplier to life science sector has a range of labware products across varied customer segments and is operating in an industry which has an addressable market,” Hem Securities said.
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The company is well-equipped and automated manufacturing facilities with geographic reach through strong sales and distribution network has an experienced promoter backed by a strong management team. Hence we recommend ‘subscribe’ on issue, the brokerage said.
With high penetration expected in the coming years, plastic labware is expected to replace glassware products by another 15 percent to reach a market share of around 67 percent in the global laboratory equipment market by FY25, given plastic products are superior in terms of shelf life, handling, and safety benefits.
As a result, the global plastic laboratory products market is expected to record a higher CAGR of 10.50 percent to reach $13.8 billion by FY25.
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