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Salient features of the IPO:

* Lab-ware maker Tarsons Products Ltd. (TPL) is coming up with an IPO to raise Rs. 1,025cr, which opens on 15th Nov. and closes on 17th Nov. 2021. The price band is Rs. 635 - 662 per share.

* The issue is a combination of fresh and OFS. The company will not receive any proceeds from the OFS part of the issue. Of the net proceeds from the fresh issue, Rs. 78.5cr will be used for the repayment/prepayment of borrowings; and Rs. 62cr will be utilized to fund the capital expenditure for the proposed expansion. Residual funds will be used for general corporate purposes.

Key competitive strengths:

* Leading Indian supplier to life sciences sector with strong brand recognition and quality products

* Provide a diverse range of labware products across varied customer segments

* Operate in an industry, which has a large addressable market with long-standing relationships with key end customers

* Well-equipped and automated manufacturing facilities 

* Wide geographic reach through pan-India sales and distribution network

* Experienced promoter backed by strong management team

Risk and concerns:

* Unexpected change in government policies and regulations

* Higher reliance on imports for raw materials

* Lower demand of its products

* Inability to maintain the current profitability

* Working capital intensive operations

* Unfavorable forex rates

* Competition

Below are the key highlights of the company:

* In value terms, the domestic plastic labware market in 2020 was estimated at Rs. 1,225cr which is estimated to expand by 16% CAGR to reach a size of Rs. 2,576cr by 2025. Moreover, the global plastic laboratory products market is expected to expand to USD 13.8bn by 2025 from USD 8.4bn in 2020 (a CAGR growth of 10.5%).

* In terms of revenue, TPL is among the top-3 plasticware laboratory equipment companies in India. In 2020, it had around 9-12% market share in the domestic labware market. The company provides extensive range of life science products, scientific equipment & instruments and general & specialized laboratory supplies.

* The company has been manufacturing plasticware equipment for over 36 years in India. It is engaged in designing, development, manufacturing and marketing of consumables, reusables and benchtop equipment, which are used in various laboratories across research institutes, academia, pharmaceutical, contract research organizations, diagnostics and hospitals.

* Consumable category includes products such as centrifuge ware, cryogenic ware, liquid handling, PCR consumables, petri dish, transfer pipettes and others. Reusable category includes products such as bottles, carboys, beakers, measuring cylinders and tube racks. Over FY19-21, consumables and reusable categories products contributed an average of 58% and 36% to the total revenue.

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