Tempsens IPO surges 5.94x on Day 2 with 90% GMP; analysts see long-term value

Tempsens Instruments opened its second day of bidding on Thursday with the kind of investor appetite that makes underwriters smile. By midday, the offering had drawn 5.94 times the shares on offer—a clear signal that the market wanted in. The grey market, where unofficial trades happen before official listing, was pricing the stock at a 90% premium to the upper end of the price band, suggesting that when shares finally hit the exchange on August 28, buyers might see their money grow substantially in a single day.

The company, which manufactures temperature sensors, electrical heating systems, and specialized cables for industrial use, is trying to raise Rs 650 crore. The offering consists of 32 lakh newly issued shares worth Rs 95 crore and an offer for sale of 1.85 crore shares worth Rs 555 crore. Shares are priced between Rs 285 and Rs 300, with a minimum investment of Rs 15,000 per lot for retail buyers.

What stands out is where the demand came from. Retail investors—the individual traders and savers—bid 6.46 times their allocated portion. Non-institutional investors, a category that includes smaller funds and trading firms, went even harder, bidding 12.51 times. The qualified institutional buyers, the big money that typically anchors these deals, were more measured at just 5% subscription. This pattern suggests confidence spreading through the retail and mid-market investor base, even if the largest institutions are holding back.

Tempsens itself has solid numbers to point to. In the fiscal year ending March 2026, the company grew revenue 19% to Rs 455.86 crore and grew profit after tax 14% to Rs 71.07 crore. It holds roughly 10.5% of India's temperature sensor market and sells to more than 1,000 customers across more than 80 countries. The company was incorporated in 1990 and has built a presence spanning Asia Pacific, Africa, the Middle East, Europe, and the Americas. Before the public offering even opened, anchor investors—the large funds that commit early to stabilize demand—put in Rs 194.54 crore across 29 investors.

Yet there is a tension in the numbers. At the upper price band of Rs 300, the company trades at a price-to-earnings multiple of 35.4 times and an enterprise value to EBITDA multiple of 25.64 times. These are not cheap valuations. Anand Rathi, the brokerage analyzing the deal, acknowledges this directly: at the upper end, the IPO is fully valued. The firm nonetheless issued a 'Subscribe: Long Term' rating, betting that the company's growth trajectory, diversified product lines, and international expansion justify paying a premium now if you are willing to hold for years.

The company plans to use the fresh issue proceeds—Rs 73.13 crore net—to fund capital expenditure of Rs 18.13 crore for its heating and cable businesses and to pay down Rs 55 crore in debt. The remainder goes to general corporate purposes. Allotment is scheduled for August 25, with listing three days later on both the NSE and BSE.

The grey market premium of Rs 270 per share implies a listing price around Rs 570, nearly double the upper price band. But grey market pricing is unofficial and can shift. What matters for investors now is whether they believe Tempsens can sustain growth at these valuations or whether the premium reflects temporary enthusiasm that will fade once trading begins.