Despite volatile markets and nervousness around new IPO listings, Tarsons Products may see decent listing gains on Friday, when it would enter the secondary markets
The grey market premium, which is indicative of the listing gains in the secondary market, had plummeted for most of the counters in the wake of a disastrous listing of Paytm shares. However, as buying returned to the counter, hope also spread to other names.
As per the traders active in the unofficial market for unlisted shares, Tarson Products shares are trading at a premium of RS 175-180, which is more than 27 per cent above the IPO price band of the company shares.
“Tarsons Products has strong financials where margins are very impressive and it also has well-experienced management. The company has strong cash flows and it is likely to become debt-free post IPO, however, the valuations look expensive therefore aggressive investors with a long-term view can hold this stock while those who were playing for listing gains should book profit,” said Aayush Agrawal, Sr. Research Analyst – Merchant Banking, Swastika Investmart.
He added that he is expecting a listing gain of around 20-25 per cent based on subscription figures and the grey market trend.
The initial public offer (IPO) of life sciences company Tarsons Products was subscribed 77.49 times last week, helped by huge interest from institutional investors. The RS 1,023.84-crore IPO received bids for 84,02,81,684 shares against 1,08,44,104 shares on offer, as per NSE data.
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The initial public offer (IPO) had a fresh issue of up to RS 150 crore and an offer for sale of up to 1,32,00,000 equity shares. It had a price range of RS 635-662 per share.
In the anchor round, Tarsons Products had mopped up RS 306 crore from names like Government of Singapore, ICICI Prudential Mutual Fund, Aditya Birla Sun Life Mutual Fund, Mirae Asset MF, Abu Dhabi Investment Authority, Macquarie, Sundaram MF, Eastbridge Capital and Reliance general Insurance among others.
The company said proceeds from the fresh issue will be utilized towards paying debt, funding a part of the capital expenditure for the new manufacturing facility at Panchla in West Bengal, and general corporate purposes.
Tarsons Products is engaged in designing, developing, manufacturing, and supplying a diverse range of quality labware products used in laboratories across research organizations, academic institutes, pharmaceutical firms, diagnostics companies and hospitals.
It manufactures a range of quality labware products that help advance scientific discovery and improve healthcare. The company currently operates through its five manufacturing facilities located in West Bengal.