In the wake of the disastrous listing of Paytm shares, the gray market premium, indicating listing gains in the secondary market, had fallen for most of the counters. However, as purchases returned to the counter, the hope spread to other names.
According to traders operating in the unofficial market for unlisted shares, shares of Tarson Products are trading at a premium of Rs 175-180, which is 27 per cent higher than the IPO price band of the company’s shares.
“Tarson Products has a strong financial position where margins are very impressive and it also has experienced management. The company has strong cash flow and is likely to be debt free post IPO, however, valuations seem costly hence the long run. Aggressive investors with a duration outlook can hold this stock, while those who were playing for listing gains should book profits, said Ayush Agarwal, Senior Research Analyst – Merchant Banking, Swastika Investmart.
He said he expects listing gains of around 20-25 per cent based on subscription figures and gray market trends.
Life science company Tarson Products’ initial public offering was subscribed 77.49 times last week, helped by huge interest from institutional investors. According to NSE data, bids were received for 84,02,81,684 shares in the Rs 1,023.84 crore IPO, while there were 1,08,44,104 shares on offer.
The initial public offering (IPO) had an offer for fresh issue of up to Rs 150 crore and sale of 1,32,00,000 equity shares. Its price was Rs 635-662 per share.
In the anchor round, Tarson Products raised 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 the proceeds from the new issue will be used to pay off debt, finance a portion of the capital expenditure for the new manufacturing facility at Panchala in West Bengal and for general corporate purposes.
Tarson Products is engaged in the design, development, manufacturing and supply of a diverse range of quality labware products to be used in laboratories in research organizations, academic institutions, 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.