1 week ago
Tempsens Instruments IPO Draws Strong GMP Amid Valuation Concerns
Tempsens Instruments is selling shares to the public through an IPO.
Investors can bid at prices between ₹285 and ₹300 per share.
The IPO includes new shares sold by the company and shares sold by existing shareholders.
In the unofficial grey market, the shares are being discussed at a much higher price.
This suggests that some people expect the shares to rise when trading begins, but it is not a guarantee.
Some brokerages recommend applying because the company operates in a specialised market.
Other comments say investors should be careful because the IPO is expensive and the business has several concentration risks.
The shares are expected to list on the BSE and NSE after the subscription process ends.
Tempsens Instruments’ IPO is scheduled to open on 20 August and close on 24 August, with a price band of ₹285–₹300 per share.
The issue comprises a ₹95 crore fresh issue and an offer for sale of 1.85 crore shares worth about ₹555 crore, taking the total issue size to roughly ₹650 crore.
The grey-market premium is reported at ₹220, implying an estimated ₹520 listing price, or a 73.33% premium over the upper price band.
Brokerages cite the company’s niche position, technical capabilities, strong margins, market leadership and exposure to industrial automation and manufacturing growth.
Risks include premium valuation, working-capital intensity, customer and sector concentration, cyclicality and concentration of manufacturing operations in Udaipur.
- Who
- Tempsens Instruments, its existing shareholders, investors and the brokerages reviewing the IPO.
- What
- The company is launching an IPO with a ₹285–₹300 price band, comprising a fresh issue and an offer for sale.
- Where
- The shares are expected to list on the BSE and NSE; the company’s manufacturing operations are concentrated in Udaipur.
- When
- Subscription is scheduled from 20 August to 24 August; allotment is expected on 25 August and listing on 28 August.
- Why
- The company plans to use fresh proceeds for capital expenditure, repayment of borrowings and general corporate purposes, while existing shareholders are selling shares through the OFS.
Case for Applying
Reasons for Caution
Brokerage recommendations
Case for Applying
SBI Securities and Geojit reportedly recommend subscribing, while Kantilal Chhaganlal Securities recommends subscription for potential listing gains and long-term investment.
Reasons for Caution
The brokerage views reported in the articles still advise investors to consider the premium valuation and participate according to their risk tolerance and investment horizon.
Valuation
Case for Applying
Kantilal Chhaganlal Securities says the valuation of 37.3 times FY26 P/E at the upper band could be supported by the company’s growth prospects, niche position and market leadership.
Reasons for Caution
Swastika Investmart says the valuation is not inexpensive, particularly for an industrial niche player without direct listed peers.
Business outlook and risks
Case for Applying
Supporters point to technical capabilities, high entry barriers, healthy margins, a diversified mix of projects and MRO activities, and exposure to India’s manufacturing growth.
Reasons for Caution
Cautionary factors include sector cyclicality, rising working-capital intensity, customer and sector concentration, and manufacturing concentration in Udaipur.
Key facts
- IPO price band
- ₹285 to ₹300 per equity share
- Total issue size
- Approximately ₹650 crore, including the fresh issue and offer for sale
- Fresh issue
- ₹95 crore
- Offer for sale
- 1.85 crore shares worth about ₹555 crore, sold by existing shareholders including promoters
- Grey-market premium
- ₹220, implying an estimated ₹520 listing price at the upper band
- Use of fresh proceeds
- ₹18.1 crore for capital expenditure, ₹55 crore for repayment of certain borrowings and the balance for general corporate purposes
- Expected listing
- 28 August on the BSE and NSE
Sources
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