ADV Partners-backed Tarsons’ IPO covered 77.5 times; Go Fashion IPO sails through

 ADV Partners-backed Tarsons’ IPO covered 77.5 times; Go Fashion IPO sails through

The initial public offering of Kolkata-based medical equipment maker Tarsons Products Ltd received an astounding response from investors while womenswear maker Go Fashion (India) Ltd’s IPO sail through on the opening day.

Tarsons’ offering of 10.84 million shares, excluding the anchor portion, received bids for 840.28 million shares on the third and final day on Wednesday, stock-exchange data showed. This means the IPO was subscribed 77.5 times.

Institutional investors bid for nearly 116 times the shares set aside for them. The portion reserved for non-institutional investors, comprising corporate and wealthy investors, was subscribed 185 times.

Retail individual investors, whose bids cannot exceed Rs 2 lakh per application, applied for 10.5 times the shares on offer.

Tarsons’ Rs 1,023 crore IPO was fully subscribed on the first day. It picked up pace on the second day on Tuesday and was subscribed 3.58 times.

Tarsons has set a price band of Rs 635-662 apiece. At the upper end of the price band, the company would be valued at Rs 3,522.25 crore (about $475 million).

A day ahead of the IPO, the company raised Rs 305 crore from a bunch of anchor investors including Singapore sovereign wealth fund GIC Pte Ltd and Abu Dhabi Investment Authority, besides Indian mutual funds and hedge funds.

The IPO comprises a fresh issue of shares worth Rs 150 crore and a secondary market sale by promoters and private equity firm ADV Partners.

ADV Partners is selling half its 49% stake in the public offering; it had invested about Rs 130 crore in 2018. It had also invested via convertible debentures. These debentures were converted and likely bought back by the company at par.

Tarsons makes laboratory plasticware equipment. It competes with the likes of Remi, Abdos, Genaxy, Accumax, Thermofisher, Eppendorf, Corning, Hettich, Beckman Coulter and IKA. The company’s revenue has grown 28% in the last two years. Most growth happened in the year ended March 2021. Its net profit shot up 77% in the same period.

While there are no comparable medical consumable companies that are listed on the stock markets, medical devices makers command high valuation multiples. For instance, medical devices maker Poly Medicure’s revenue is three times that of Tarsons but its net profit is just double because of lower margins. Poly Medicure commands a market value of Rs 8,434 crore. That’s over 60 times its profit for 2020-21.

Go Fashion

The company’s public offering of 8.08 million shares, excluding the anchor portion, received bids for 55.5 million shares. The book was subscribed 6.87 times at the end of day two, stock-exchange data showed.

Retail investors bid for 24.64 times the shares on offer while the portion reserved for non-institutional shareholders was covered 2.3x. Institutional investors’ book was covered 3.24x.

On Tuesday, the company mobilised Rs 456.12 crore from anchor investors comprising GIC, ADIA, Volrado Venture Partners and a bunch of domestic and foreign institutional shareholders.

Go Fashion has set a price band of Rs 655-690 per share. The Rs 1,013-crore IPO closes on Friday.

The offer comprises a fresh issue of Rs 125 crore and a secondary market sale by its promoters and investors including Sequoia Capital and private equity firm ICICI Venture.

Ankit Doshi

The Capital Quest