The shares of Tarsons Products hit their lowest after its Dalal Street debut on Monday’s intra-day trade in BSE. The shares of TPL fell by 5% on Monday after its listing of Rs. 630.80. Moreover, the shares are also down by 5% from their actual issue price of Rs. 662 per equity share. Additionally, this is the 6th straight trading day that the shares of this healthcare equipment supplier are quoting low.
Tarsons Product made its stock market debut on 26 November 2021, and since then, it has registered a decline of 32%.
This current result is a stark contrast compared to its early day performance. On its debut, the shares ended trading at a 27% high from its issue price of Rs. 662, and went up to Rs. 840 per share. Moreover, on 29 November 2021, the shares reached their all-time high at Rs. 928.56.
The Rs. 1,024 crore initial public offering of Tarsons Product was impressive. The subscription details also reflect the same, with an overall subscription of 77.5 times. The institutional investors subscribed 115 times, and the retail individual investor section recorded 10.5 times of subscription and the wealthy investor section registered 184 times.
This IPO performance can primarily be attributed to its recent financials and strong management. The margins of Tarsons Products have been impressive, backed by a strong cash flow. Additionally, this IPO is likely to make the company debt-free.
Hence, when you pair it with the experienced management of Tarsons Products, it is a strong proposition. Thus, the company had such notable performance in its public offering.
TPL is an Indian medical consumables manufacturing company engaged in designing, developing, manufacturing and retailing such products. Tarsons Products caters to a global clientele that includes research organisations, pharmaceutical companies, hospitals and diagnostic chains, laboratories, and CROs or contacts research organisations.
As of March 2021, the company has a product portfolio entailing more than 300 products and 1700+ SKUs. In addition, TPL has 5 manufacturing facilities and a global distribution network that allows it to ship its products to more than 40 countries.
It is difficult to pinpoint what exactly is causing this sudden downward trend of a stock that performed relatively well after its debut. However, experts believe that, since TPL primarily depends on imports for its raw materials, any issue here can hurt its manufacturing.
Additionally, overreliance on export is an issue as well for Tarsons Products. Therefore, the inability to manage this supply line can also be an issue. Additionally, the rising oil prices have increased the cost of transportation, affecting the company’s revenue in the coming quarters.
Moreover, with rising COVID-19 cases around the world, countries are again imposing lockdown norms that can further escalate this situation.
Market researchers and analysts still hold a positive outlook on the company. On the grounds of anonymity, a market analyst of a leading brokerage firm has commented that this IPO will make Tarsons Products debt-free.
However, the valuation has not been settled yet, and it looks expensive. Hence, investors who have a long-term vision can hold on to this stock, but the ones looking for listing gains should get out and make a profit.
A closer analysis of Tarsons Products’ financials will show that the company has been doing quite well. Therefore, a tough period like this is not likely to damage the company in the long run. In addition, it is operating in a sector that will only expand in the coming years.
Nonetheless, if you are planning to invest in the shares of Tarsons Products, go through every detail and conduct thorough market research before making any move.
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The face value of Tarsons Products shares is Rs. 2 per equity share.
The current sector PE ratio Tarsons Products is 73.48.
You can invest in the shares of Tarsons Products through Angel One website and mobile app.
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