Rating SUBSCRIBE
Issue Offer
Issue Opens on Nov 15, 2021Issue Close on Nov 17, 2021Total IPO size (cr)1,023.47Fresh issue150.00Offer For Sale (cr)873.47Price Band (INR)635-662Market Lot22Face Value (INR)2Retail Allocation35%Listing On NSE, BSE
Objects of the issue
⮚ For Repayment/prepayment of liabilities ⮚ For Funding of the capital expenditure
Issue Break-up (%)
QIB Portion50NIB Portion15Retail Portion35
Shareholding (No. of Shares)
Pre Issue5,09,40,420Post Issue5,32,06,281
Indicative Timetable
Finalization of Basis of Allotment23-11-2021Refunds/Unblocking ASBA Fund24-11-2021Credit of equity shares to DP A/c25-11-2021Trading commences26-11-2021
About Tarson Products Limited IPO:
Tarsons Products Limited is a 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.
Company’s product portfolio is classified into three key categories which include consumables, reusables, and others. ‘Consumables’ category includes products such as centrifuge ware, cryogenic ware, liquid handling, PCR consumables and petri dish, transfer pipettes and others. ‘Reusables’ category includes products such as bottles, carboys, beakers, measuring cylinders and tube racks. ‘Others’ category includes benchtop instrumentation such as vortex shakers, centrifuges pipettors and others. Company is one of the leading Indian company in terms of revenue in the plastic labware market in India
⮚ Company currently operates through their five manufacturing facilities located in West Bengal. These facilities are vertically integrated and equipped with automated support systems that help them to maintain quality, increase productivity, and reduce costs.
⮚ They have over 36 years of experience in life sciences through which they gained expertise in the production of a wide range of labware products.
⮚ Company have received CE-IVD certificate for their products such as micro and macro tips, cryo vials and centrifuge tubes.
⮚ Company supply their products to over 40 countries across both developed and emerging markets through a blend of branded and ODM sales.
⮚ They supply products to life sciences industry under the brand label‚ TARSONS WITH THE WORDS -TRUST DELIVEREDTM.
Outlook & Company Valuation:
The company has shown stable growth in revenue in the last 3 years where we saw a minor dip in FY20 on the back of COVID-19. Revenue of the company has grown from Rs 184.7 cr to Rs 234.3 cr over the period of FY19 to FY21; during the same period profit has grown from Rs 39 cr in FY19 to Rs 68.9 cr in FY21.
The margins of the company have grown significantly on the back of declining debt. Tarson products limited is a company with great brand awareness and high-quality goods, India’s leading life sciences supplier.
The company aims to be debt fee post the IPO and is planning for CAPEX which will further increase the revenues. The IPO is arriving at a PE of 34x on annualized Q1FY22 EPS of Rs. 4.88 which seems to be attractively priced. Thus we assign a "SUBSCRIBE" rating for listing gain and long term.
KEY MANAGERIAL PERSONNEL
⮚ Sanjive Sehgal is the Chairman and Managing Director of the Company. He holds a bachelor’s degree in science from Xavier College, Calcutta. He has over 30 years of experience in this Company.
⮚ Rohan Sehgal is the Whole-Time Director of the Company. He holds a bachelor’s degree in science (management) from the University of Manchester. He has over 7 years of experience in this Company.
⮚ Gaurav Podar is the Non-Executive Nominee Director of the Company. He has over 10 years of experience in the finance industry. He has been Non-Executive Nominee Director in this Company from June 10, 2019.
⮚ Viresh Oberai is the Independent Non-Executive Director of the Company. He holds a bachelor’s degree in history from the University of Delhi; He has over 22 years of experience with Tata Steel.
⮚ Sucharita Basu De is the Independent Director of the Company. She has over 20 years of experience in commercial and corporate agreements, capital markets and real estate.
⮚ Girish Vanvari is the Independent Director of the Company. He holds a bachelor’s degree in commerce from the University of Bombay and is a member of the Institute of Chartered Accountants of India.
⮚ Piyush Khater is the Company Secretary and Compliance Officer of the Company. He holds a bachelor’s degree in commerce with specialisation in accounting & finance from St. Xavier’s College, University of Calcutta. He has over 4 years of experience and has previously worked with Ashok Kumar Duggar & Associates. In his last position, he was assistant manager with Consolidated Consultancy Services Private Limited. Since he joined our Company on July 28, 2021, he did not receive any remuneration during the Financial Year 2021.
⮚ Santosh Agarwal is the Chief Financial Officer of the Company. He holds a bachelor’s degree in commerce from the University of Calcutta. He has over 20 years of experience and has previously worked with Polar Fans, Genpact, ICA group and Gruas Jaso Group. In his last position, he was the chief financial officer and company secretary of Jaso India. He joined the Company on October 1, 2019
COMPETITIVE STRENGTHS
⮚ Leading Indian supplier to life sciences sector with strong brand recognition and quality products.
⮚ Company provide a diverse range of labware products across varied customer segments
⮚ They operate in an industry which has a large addressable market with long-standing relationships with key end customers
⮚ Well-equipped and automated manufacturing facilities
⮚ Wide geographic reach through their pan India sales and distribution network
⮚ Experienced Promoter backed by strong management team
KEY CONCERNS
⮚ All manufacturing plants are based in West Bengal (Geographical risk).
⮚ Over 85% of the IPO proceeds would go to selling shareholders of the company.
⮚ Company 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.
⮚ Company’s manufacturing facilities are concentrated in West Bengal. Such geographical concentration can pose risk to its business.
⮚ In case of plastic products manufactured by the company gets banned in India or any markets where the company exports its products can have a material and adverse effect on its business.
COMPARISON WITH LISTED INDUSTRY PEERS
As per the RHP document, there are no listed entities whose business portfolio is comparable with that of Tarsons’s business and hence we cannot conclude whether the issue price is underpriced or overpriced. However, the IPO is arriving at a PE of 34x on annualized Q1FY22 EPS of Rs. 4.88 which seems to be attractively priced.
FINANCIALS (RESTATED CONSOLIDATED)
Particulars (Rs. In Millions) FY 2021 FY 2020 FY 2019Equity Share Capital 1.92 2.00 1.92Other Equity 2,441.46 1,973.69 1,350.81Net Worth 2,443.38 1,975.69 1,352.73Total Borrowings 334.54 358.95 645.13Revenue from Operations 2,289.11 1,759.02 1,787.48EBITDA 1,034.38 692.54 716.67Profit Before Tax 924.34 531.33 558.25Net Profit for the year 688.70 405.31 389.58
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