Tarsons Products hits lowest level since debut; down 32% from all-time high

Shares of Tarson Products (TPL) hit its lowest level since listing at Rs 630.80 after they fell 5 per cent on the BSE in Monday's intra-day trade. The shares are also down 5 per cent from its issue price of Rs 662 per share. The stock of the healthcare supplier was quoting lower for the sixth straight trading day. The shares had debuted on November 26, 2021 and has declined 32 per cent from its post listing high of Rs 928.65, touched on November 29, 2021.

TPL had made a strong stock market debut on the bourses with its shares ending 27 per cent higher (at Rs 840) than the issue price of Rs 662 on debut day.

The strong debut followed an impressive response to the company's Rs 1,024-crore IPO. The offering garnered 77.5 times subscription. The institutional portion was subscribed 115 times, the wealthy investor portion by 184 times, the retail portion by 10.5 times.

"TPL has strong financials where margins are very impressive and it also has well-experienced management. The company has a strong cash flow 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 gain should book profit," said Aayush Agrawal, senior research analyst - Merchant Banking at Swastika Investmart.

TPL is an Indian labware company engaged in the designing, development, manufacturing and marketing of 'consumables', 'reusables' and 'others' including benchtop equipment, used in various laboratories across research organizations, academia institutes, pharmaceutical companies, Contract Research Organizations ("CROs"), Diagnostic companies and hospitals.

TPL's end customers expect it to maintain high quality standards and any failure by it to comply with such quality standards may have an adverse effect on demand from end customers and on its reputation, business, results of operations and financial condition are among key concerns according to HDFC Securities.

"TPL imports over 75 per cent of raw materials and any delay, interruption, or reduction in the supply of raw materials to manufacture its products may adversely affect its business, results of operations, cash flows and financial condition," the brokerage firm said in an IPO note.

Business is dependent on distribution network and inability to effectively manage existing distribution network in the domestic market or overseas market or to further expand distribution network in overseas market may have an adverse effect on the business, results of operations and financial condition. The COVID-19 pandemic, or any future pandemic or widespread public health emergency, could materially and adversely impact the business results of operations, cash flows and financial condition, it added.

At 12:10 pm, TPL was trading 4.4 per cent lower at Rs 633.90 on the BSE, as compared to a 0.80 per cent decline in the S&P BSE Sensex. A combined around 600,000 shares had changed hands on the NSE and BSE till the time of writing of this report.