ADV Partners-backed Tarsons gains on trading debut as Sensex, Nifty sink

 ADV Partners-backed Tarsons gains on trading debut as Sensex, Nifty sink

Kolkata-based medical equipment maker Tarsons Products Ltd made a positive start on the stock exchanges on Friday with its shares listing at a 5.74% premium to its issue price and then inching higher.

Shares of Tarsons Products, which is backed by private equity firm ADV Partners, began trading on the BSE at Rs 700 apiece compared with its IPO price of Rs 662 per share. The stock touched a high of Rs 800 in early trade and a low of Rs 634 apiece.

On the BSE, the 30-stock benchmark Sensex tanked almost 1.8% in early trade to 57,745.10 points on heavy selling. The National Stock Exchange’s Nifty50 benchmark was also down 1.8% at 17,222 points.

Tarsons now commands a market capitalization of nearly Rs 4,211 crore as against a valuation of Rs 3,522.25 crore it sought in the IPO.

It joins over four dozen Indian firms that have listed their shares on the stock exchanges so far this year in an unprecedented rush for IPOs as abundant liquidity has pushed stock markets to record levels.

The positive start to Tarsons market debut follows the Rs 1,023-crore IPO that received an astounding response from investors with its issue subscribed 77.5 times last week.

The company had set a price band of Rs 635-662 apiece. Its IPO comprised a fresh issue of shares worth Rs 150 crore and a secondary market sale by promoters and ADV Partners.

ADV Partners sold half its 49% stake in the public offering; it had invested about Rs 130 crore in 2018. It had also invested via convertible debentures. Those 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.

Ankit Doshi

The Capital Quest