Tarsons Products Limited IPO

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(i) Tarsons Products Limited 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

(ii) It has a diversified product portfolio with over 1,700 SKUs across 300 products. Its 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.

(iii) Currently, the company has 5 manufacturing facilities located in West Bengal spread across approximately 20,000 sq. mts of area. The company has a strong distribution network across India comprising of over 141 authorized distributors as of March 31, 2021 and supplies its products to more than 40 countries.

(iv) Clients
Some of the end customers include customers such as Indian Institute of Chemical Technology, National Centre for Biological Sciences across academic institutes and research organizations; Dr Reddy’s Laboratories, Enzene Biosciences across pharmaceutical sectors; Syngene International, Veeda Clinical Research across CROs; and Molbio Diagnostics, Agappe Diagnostic, Metropolis Healthcare, Dr. Lal Path Labs, Mylab Life Solutions across other sectors such as diagnostics.

Industry Analysis
The plastic labware market in India which is estimated as ₹1225 Crores as of year 2020 in value terms and estimated to expand at a CAGR of 16.00% to reach approximately ₹2575 Crores by year 2025 (Source: Frost & Sullivan Report).

Tarsons Products cater to the global plastic laboratory products market which was estimated to be USD 8.4 billion in year 2020 and is expected to expand at a CAGR of approximately 10.50% to reach approximately USD 13.8 billion by year 2025 (Source: Frost & Sullivan Report).

They supply products to over 40 countries across both developed and emerging markets through a blend of branded and ODM sales. The overseas sales in Fiscal 2021 accounted for ₹75 Crores representing 33.02% of the revenue from operations.

Experienced Management
The Chairman and Managing Director, Sanjive Sehgal, having over 30 years of experience, and Whole-Time Director, Rohan Sehgal with over 7 years of experience in the labware manufacturing sector in India, have been instrumental in the growth of the Company. They are supported by an able management team which contribute significantly in the growth and management of the Company.

Competitive Strengths
i. Diverse range of labware products
ii. Large addressable market with long-standing relationships
iii. Well-equipped and automated manufacturing facilities

Objects of the Tarsons Products Limited IPO:

The Offer comprises the Fresh Issue and the Offer for Sale. The company proposes to utilize the Net Proceeds towards the funding of the following objects: 1. Repayment/prepayment of all or certain of the borrowings 2. Funding a part of the capital expenditure for the new manufacturing facility at Panchla, West Bengal (the “Proposed Expansion”) 3. General corporate purposes.
DRHP of Tarsons Products Limited IPO
RHP of Tarsons Products Limited IPO

Tarsons Products Limited IPO Details:

Open Date: Nov 15 2021
Close Date: Nov 17 2021
Total Shares: 15465861
Face Value: ₹ 2 Per Equity Share
Issue Type: Book Built Issue
Issue Size: 1,023.47 Cr.
Lot Size: 22 Shares
Issue Price: ₹ 635-662 Per Equity Share
Listing At: NSE,BSE
Listing Date: Nov 26 2021

Promoters And Management:

i. 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 the Company. He has been the Managing Director of the Company from July 26, 2018. Sanjive Sehgal has not been able to trace his bachelor’s degree in science from Xavier College, Calcutta. ii. 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 the Company. He has been the Whole Time Director of the Company from July 25, 2018. iii. Gaurav Podar, is the Non-Executive Nominee Director of the Company. He holds a bachelor’s degree in management studies and a master’s degree in management studies from the Mumbai University. He has been working as an investment professional in ADV Advisors India Private Limited since September 16, 2016 and has previously worked with Tata Capital Financial Services Limited, AION India Investment Advisors Private Limited and Boston Analytics Private Limited. H

Financials of Tarsons Products Limited IPO:

 
Particulars (in Cr) 2021 2020 2019
Revenue 228 175 178
Cost of materials consumed 44 38 42
Purchase of Stock in Trade 11 11 14
Change in inventory 5 -1 -5
Employee Benefit Expense 24 20 16
Other Expenses 40 37 40
EBITDA 104 70 71
OPM 45.61% 40.00% 39.89%
Depreciation 13 14 14
Finance Cost 2 6 7
PBT 92 53 55
PAT 68 40 40
EPS 12.83 7.55 7.55

Comparison With Peers:

There are no listed entities whose business portfolio is comparable with that of our business and comparable to our scale of operations.

Recommendation on Tarsons Products Limited IPO:

Review and Recommendation of Tarson Products View Analytics  IPO by InvestorZone is 5/10 1. There is not much growth in the company in the last 3 years, both in Revenue and PAT. 2. The products are unique and there is no listed company in this space. 3. P/E based on FY21 is 53 which looks stretched.

Lead Manager of Tarsons Products Limited IPO:

  1. Edelweiss Capital Limited
  2. ICICI Securities Limited
  3. SBI Capital Markets Limited

Registrar of Tarsons Products Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

Tarsons Products Limited Martin Burn Buisness Park, Room No. 902 BP- 3, Salt Lake, Sector- V, Kolkata 700091 Phone: +91 33 3522 0 Email: piyush@tarsons.in Website: https://www.tarsons.com/

Discussion on Tarsons Products Limited IPO:

3 Comments

    Valuation of Tarsons Products

    1. Shares Outstanding before IPO = 50,940,420
    2. Fresh Shares to be issued in IPO = 22,65,861
    3. Total Shares = 53,206,281
    4. Issue Price = 662
    5. Mcap = 3500 Crores
    6. PAT (FY21) = 53 Crores
    7. EPS (FY21) = 10
    8. P/E = 62x ( Very costly)

    Reply

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