Tarsons IPO subscribed 3.58 times on second day of share sale

Market


The initial public offering (IPO) of Tarsons Products Ltd, excluding the anchor book, was subscribed 3.58 times on Tuesday, the second of the three-day offering.

As of 5pm, the IPO received applications for 38.80 million shares against the 10.84 million shares on offer, stock exchange data showed. The institutional investor category was subscribed 1.30 times while the non-institutional category comprising high net-worth individuals was subscribed 3.98 times. Retail investors, whose investments cannot exceed 2 lakh per subscription, subscribed to 4.74 times of the 5.39 million shares on offer, the data showed.

Tarsons showed strong performance in the past two years as covid-19 boosted demand for its products. While revenue recorded 13% CAGR (compound annual growth rate) during FY19-FY21, Ebitda and net profit recorded 20% and 33% CAGR, respectively, during the period. Ebitda margin improved from 40.1% in FY19 to 45.2% in FY21 and 53% in Q1FY22. The IPO is valued at 51x FY21 earnings and 35.5x FY22 annualized earnings, which look to be reasonably priced, say analysts.

Given the rising awareness about health, a 10.5% CAGR expectation of the global plastics laboratory products market over FY20-FY25E, high market share of plastic labware and expansion plans, Reliance Securities expects Tarsons to sustain a healthy growth.

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