Tempsens Instruments (India) Limited
Issue Structure & OFS vs Fresh Capital Split
| Offering Parameter / Tranche | Allocation & Value | % of Gross Issue | Strategic Mandate / Terms |
|---|---|---|---|
| Fresh Issue (Primary Growth Capital) | ₹95.00 cr (aggregating up to ₹950.00 million). | 14.6% | Balance sheet equity expansion directly fueling capex, debt repayment & operations |
| Offer for Sale (OFS - Insiders) | 18,500,000 Equity Shares aggregating up to ₹555.00 cr at issue price of ₹300. | 85.4% | Secondary liquidity realization for existing promoters & early institutional funds |
| Gross Total Issue Size | ₹650.00 Cr | 100.0% | Aggregate primary market capital raising at upper price band |
| Net Proceeds Reaching Company | Net Proceeds = ₹95.00 cr minus company's portion of Offer-related expenses. | - | Net growth funds after deducting book building issue & underwriting expenses |
| Anchor Investor Allocation Tranche | ₹195.00 Cr (30.0% of Issue) | Up to 30.0% | Reserved anchor allotment tranche for institutional Qualified Institutional Buyers (QIBs) |
| Pre-IPO WACA Benchmark | Selling Shareholders WACA: CP Talesara ₹Nil, Amit Talesara ₹0.05, Puneet Talesara ₹0.05, Ankit Talesara ₹0.04, NK Pande ₹0.06 (adjusted for bonus & split). Huge gap to ₹300 issue price. | Weighted average cost of acquisition for promoters & early funds | |
| Selling Shareholders & Dilution | Promoter Group: Amit Talesara (4.815 mn shares), Puneet Talesara (1.294 mn shares), CP Talesara (3.788 mn shares); Others: Ankit Talesara (3.788 mn shares), NK Pande (4.815 mn shares). No PE funds. | ||
| Intermediary / Regulatory Entity | Entity Name / Details | Statutory Function & Status |
|---|---|---|
| Book Running Lead Managers (BRLMs) | SEBI Registered Merchant Bankers / BRLMs | Issue pricing, underwriting, book building & institutional roadshows |
| Registrar to the Issue | SEBI Category-I Registrar | Allotment finalization, Demat share transfer & ASBA refund processing |
| Proposed Listing Exchanges | NSE / BSE | Trading segments, ticker assignment & continuous disclosure compliance |
| Regulatory Prospectus Stage | DRHP / RHP Filed | SEBI ICDR compliance review & exchange in-principle listing approval |
Revenue Breakdown, Product Mix & Customer Concentration
| Product / Operating Segment | Share (%) | Value / Channel |
|---|---|---|
Temperature Sensing Solutions & Sensors | ₹198.38 Cr | |
Specialized High-Temp Cables | ₹154.42 Cr | |
Industrial Electrical Heating Solutions | ₹92.08 Cr |
| Market Segment / Customer Concentration Tier | Share (%) | Reported Value | Concentration & Risk Profile |
|---|---|---|---|
| Temperature Sensors & Pyrometry Solutions | 44.6% | ₹198.38 Cr | Thermocouples, RTDs, thermal imagers |
| Specialized High-Temperature Cables | 34.7% | ₹154.42 Cr | Critical industrial instrumentation cables |
| Industrial Electrical Heating Solutions | 20.7% | ₹92.08 Cr | Heating elements for steel, glass, cement |
| Domestic vs Export Revenue Mix | Domestic: 71.7% | Exports: 28.3% | ₹319 Cr / ₹126 Cr | Sales to Germany, Europe, Asia |
| Top 1 Customer Concentration | <3.5% | ₹15.57 Cr | Zero customer dependency |
| Top 10 Customers Concentration | 18.6% | ₹82.73 Cr | Broad base across 3,000+ industrial OEMs |
Capital Allocation (Where the Fresh Money Goes)
| Object of the Offer / Proposed Expenditure | Amount (₹ Cr) | % of Fresh Issue | Deployment Timeline / Purpose |
|---|---|---|---|
| Debt Deleveraging (Prepayment of borrowings) | ₹55.00 Cr | 55.0% | Scheduled repayment of term debt |
| Unit IV & Unit VI Plant & Machinery Capex | ₹18.13 Cr | 18.1% | Specialized cable & heating elements |
| General Corporate Purposes (GCP) | ₹23.75 Cr | 23.8% | Working capital & operations |
| Total Fresh Growth Capital | ₹100.00 Cr | 100.0% | Balance Sheet Inflow |
3-Year Audited Financial Health & Margins
| Audited Metric / Line Item | FY24 | FY25 | FY26 | 3-Yr CAGR |
|---|---|---|---|---|
| Revenue from Operations | ₹274.81 Cr | ₹378.53 Cr | ₹444.88 Cr | +27.2% |
| EBITDA (Operating Profit) | ₹61.13 Cr (22.0%) | ₹97.32 Cr (25.5%) | ₹113.17 Cr (24.8%) | +36.1% |
| Profit After Tax (PAT) | ₹40.92 Cr (14.7%) | ₹62.56 Cr (16.4%) | ₹71.07 Cr (15.6%) | +31.8% |
| Operating Cash Flow (CFO) | ₹37.09 Cr | ₹54.15 Cr | ₹42.02 Cr | +6.4% |
| ROCE (Return on Capital) | 22.82% | 23.08% | 21.61% | 22%+ ROCE |
| Debt-to-Equity (D/E) | 0.15x | 0.16x | 0.15x | Low Debt |
Governance, Lock-in & Litigation Review
| Shareholder Category / Promoter Group | Pre-IPO Holding (%) | Post-IPO Holding (%) | Mandatory Lock-in Terms & Dilution |
|---|---|---|---|
| Promoters (Virendra Prakash Rathi & Family) | 80.52% | 55.40% | 20% locked for 18 Mos; balance 6 Mos |
| Public & Institutional Allottees | 19.48% | 44.60% | Fresh + 25% OFS float |
| Litigation Category / Proceedings | Adjudicating Forum | Quantifiable Exposure | Materiality Assessment |
|---|---|---|---|
| Direct Tax & Assessment Disputes | ITAT | ₹1.14 Cr | Minor tax disputes |
| Arbitration Claim against Subsidiary (Theia) | Commercial Arbitration | ₹11.04 Cr | Sub judice before arbitrator |
1. Executive Business Summary & Core Operations
Tempsens Instruments enters the market as India's premier thermal engineering and sensor specialist, combining 24.8% EBITDA margins and 21.6% ROCE with consistent free cash flow. At ₹300 per share (36.0x P/E), the valuation offers a reasonable entry point into a high-moat, indigenised precision engineering market leader.
2. Value Proposition, Products & Operations
Tempsens Instruments (India) Limited designs, manufactures, and calibrates precision temperature sensors (thermocouples, RTDs, pyrometers, thermal imagers), industrial electric process heaters, and specialized instrumentation cables for heavy process industries including metals, petrochemicals, power, glass, and defence.
3. Industry Dynamics & Market Positioning
The ₹650.00 cr IPO comprises a ₹95.00 cr Fresh Issue and an Offer for Sale of 18,500,000 equity shares (~₹555.00 cr at the issue price of ₹300). Primary proceeds will prepay ₹55.00 cr of borrowings and fund ₹18.13 cr of capacity expansion in electrical heating and specialized cables.
4. Detailed Financial Trajectory & Margin Analysis
Unlike many pre-IPO engineering businesses, Tempsens shows genuine cash backing: 3-year cumulative CFO reached ₹133.26 cr against PAT of ₹174.54 cr (0.76x conversion), generating positive Free Cash Flow of +₹76.71 cr over FY24-FY26 with zero auditor qualifications from Walker Chandiok & Co LLP.
5. Promoter Integrity, Governance & Shareholding
Promoters hold 80.52% pre-issue with zero share pledge. The Board maintains 50% independent director representation with diverse professional backgrounds, promoter remuneration is modest at 3.71% of PAT, and related party transactions are minimal (<0.5% of sales) following the Marathon amalgamation.
6. Relative Valuation & Benchmark Multiples
| Company Name | CMP / Issue Price (₹) | P/E Ratio (x) | EV / EBITDA (x) | RoNW / ROCE (%) | Annual Revenue (₹ Cr) |
|---|---|---|---|---|---|
| Tempsens Instruments (India) Limited | ₹300 | 32.3x | 18.4x | 21.6% | ₹444.88 Cr |
| Honeywell Automation India Limited | ₹48,000 | 74.2x | 46.5x | 22.1% | ₹3,950.00 Cr |
| ABB India Limited | ₹7,800 | 82.4x | 52.0x | 28.5% | ₹10,440.00 Cr |
| Forbes & Company Limited | ₹650 | 38.5x | 19.8x | 15.2% | ₹320.00 Cr |
| Industrial Instrumentation Composite | - | 65.0x | 39.4x | 21.9% | - |
At the issue price of ₹300, Tempsens is valued at 36.01x FY26 Diluted EPS (₹8.33) and 32.33x Adjusted EPS, with an EV/EBITDA of 22.38x and P/B of 4.87x. Given superior 24.8% operating margins and 27.2% revenue CAGR, the valuation appears fair relative to premium industrial peers.