Tempsens Instruments (India) IPO (20-24 August) Analysis

IPO Analysis | BSE and NSE Main Board | 100% Book Built Offer (Fresh Issue and Offer for Sale) | Regulation 6(1)

Based on Red Herring Prospectus dated August 14, 2026 | Temperature Sensors, Electrical Heating Solutions and Specialized Cables | Udaipur, Rajasthan / Vadodara, Gujarat

STATUS: LIVE RHP, ANCHOR BID AUGUST 19, BIDDING OPENS AUGUST 20 AND CLOSES AUGUST 24, 2026

Fresh Issue: up to Rs.950 Million | Offer for Sale: up to 1,85,00,000 Equity Shares by 5 Promoter Group and Other Selling Shareholders | Main Board Listing on BSE and NSE

India's Largest Manufacturer of Contact and Non-Contact Temperature Sensors by Revenue (F&S Report) | No Listed Peer Exists | RoNW Declined Every Year, Explained by a Disclosed Net Worth Jump from the Marathon Heater Amalgamation

 Tempsens Instruments (India) Limited was incorporated on September 20, 1990, and has grown into a public limited company ahead of this Offer. Its CIN is U31402GJ1990PLC149769, with dual registered/corporate offices in Vadodara, Gujarat and Udaipur, Rajasthan. The Promoters are Virendra Prakash Rathi, Vinay Rathi and Pratap Singh Talesara.

Per the F&S Report commissioned for this Offer, the Company is the largest manufacturer of contact and non-contact temperature sensors in India by revenue, and one of the largest manufacturers of electrical heaters in the country, with a strategic focus on indigenisation that the Company states creates high entry barriers.

The business spans 3 product categories: Temperature Sensing Solutions (44.59% of FY26 revenue), Specialized Cables (34.71%) and Electrical Heating Solutions (20.70%, a segment that has scaled rapidly from just 3.90% of revenue in FY24).

The Company has grown partly through inorganic expansion, including the amalgamation of Marathon Heater (India) Private Limited in Fiscal 2025 (which brought subsidiaries Pyrosens and Accurate Opto into the group) and, in Fiscal 2026, the acquisition of Tempsens Instruments GmbH (Germany, with a Polish subsidiary) and Tempsens Measurement and Control Private Limited.

Revenue from operations grew from Rs.2,748.10 million in Fiscal 2024 to Rs.4,448.78 million in Fiscal 2026, a 27.23% 2 year CAGR per the Company's own disclosure, while PAT grew from Rs.409.19 million to Rs.710.67 million over the same period.

RoNW, however, declined in every one of the 3 disclosed years (22.70% to 14.06% to 13.55%), a trend substantially explained by a large, disclosed, one-time net worth increase from the Marathon Heater amalgamation rather than deteriorating operating performance, discussed in detail in Section 4.

Key Basics

Particulars	Details
Document Type	Red Herring Prospectus (RHP) dated August 14, 2026. This is a live offer: Anchor Investor Bid Wednesday, August 19, 2026, Bid or Offer opens Thursday, August 20, 2026 and closes Monday, August 24, 2026.
Issue Structure	100% Book Built Offer comprising a Fresh Issue aggregating up to Rs.950.00 million and an Offer for Sale of up to 1,85,00,000 Equity Shares by 5 Selling Shareholders. Face value Rs.4 per share, an unusual denomination for this report series.
Face Value	Rs.4 per Equity Share.
Selling Shareholders and WACA	3 Promoter Group Selling Shareholders: Amit Talesara (up to 48,15,543 shares, WACA Rs.0.05), Puneet Talesara (up to 12,94,480 shares, WACA Rs.0.05) and Chandra Prakash Talesara (up to 37,87,720 shares, WACA Nil); 2 Other Selling Shareholders: Ankit Talesara (up to 37,87,720 shares, WACA Rs.0.04) and Nirmal Kumar Pande (up to 48,14,537 shares, WACA Rs.0.06). All 5 hold near-zero cost bases.
Eligibility Route	Regulation 6(1) of the SEBI ICDR Regulations, 2018, the standard main board profitability-based eligibility route.
Listing Exchange	Main board listing on both BSE Limited and the National Stock Exchange of India (NSE); NSE is the Designated Stock Exchange.
BRLMs	A 2-bank syndicate: ICICI Securities Limited and JM Financial Limited.
Registrar	KFin Technologies Limited.
Bid or Offer Dates	Anchor Bid: Wednesday, August 19, 2026. Opens: Thursday, August 20, 2026. Closes: Monday, August 24, 2026.
Listed Peers, One Line	None. The Company states there are no listed companies in India or globally operating across the same combination of segments (temperature sensing, electrical heating and specialized cables).

This is a diversified, technically differentiated industrial manufacturer with a genuinely independently verified market leadership position, but no directly comparable listed peer given its specific combination of product segments.

The Offer for Sale is entirely conducted by Promoter Group and Other Selling Shareholders (none by the 3 named Promoters themselves) at near-zero cost bases.

How Will the IPO Money Be Used?

Object	Estimated Amount (Rs. Million)	Substantiation
Funding capital expenditure towards electrical heating solutions and specialized cable solutions	181.34	A specific rupee figure disclosed for the Company's 2 fastest-growing product segments; further itemisation not located in the summary reviewed here.
Pre-payment or scheduled repayment of certain outstanding borrowings	[amount not fully captured in excerpt]	A specific rupee figure disclosed as a standalone Object.
General corporate purposes	[TBD]	To be finalised upon determination of the Offer Price; standard cap conventions apply.

The capital expenditure Object is specifically directed at the Company's 2 growth segments, electrical heating solutions and specialized cables, aligning with the Company's own disclosed strategic direction (electrical heating has grown from 3.90% to 20.70% of revenue over the 3 year track record).

The Company's own Risk Factors caution that there is no assurance the Objects of the Offer will be achieved within the expected timeframe, or at all. As with all RHPs at this stage, the fund requirements have not been independently appraised, and the Gross Proceeds, Net Proceeds and General Corporate Purposes figures remain undetermined until the Offer Price is fixed.

Financial Performance

P&L and Key Metrics (Rs. Million unless stated)

Particulars	FY 2026	FY 2025	FY 2024
Revenue from operations	4,448.78	3,785.26	2,748.10
Y-o-Y revenue growth (%)	17.53	37.74	15.98
Total income	4,558.55	3,824.68	2,780.42
EBITDA	1,131.73	973.22	611.27
EBITDA margin (%)	24.83	25.45	21.98
Profit after tax	710.67	625.55	409.19
PAT margin (%)	15.59	16.36	14.72
Return on equity / RoE (%)	13.54	14.08	20.02
Adjusted RoE (%)	20.70	23.05	20.02
Return on capital employed (%)	21.61	23.08	22.82
Return on net worth / RoNW (%)	13.55	14.06	22.70
Debt to equity ratio (times)	0.15	0.16	0.15
Net working capital days	210	193	152
Revenue from operations outside India	1,258.21	1,002.14	586.36

Independently recomputed, revenue grew 37.74% in FY25 and a further 17.53% in FY26, reconciling with the RHP's own disclosed 27.23% 2 year CAGR, while PAT grew 52.9% and 13.6% respectively over the same 2 years. EBITDA margin improved from 21.98% (FY24) to 25.45% (FY25) before easing slightly to 24.83% (FY26), and PAT margin followed a similar pattern (14.72% to 16.36% to 15.59%), both remaining healthy throughout despite the modest FY26 dip.

The headline RoE and RoNW figures show a sharper decline (from over 20% in FY24 to roughly 13.5% in FY26), which at first glance could look like deteriorating capital efficiency, but the Company's own Risk Factors provide a specific, disclosed explanation: the Marathon Heater amalgamation added Rs.1,901.99 million to net worth in Fiscal 2025 alone (net worth rose from Rs.1,806.13 million to Rs.4,306.27 million that year), a one-time structural increase in the equity base that mechanically depresses RoE and RoNW even as absolute profit continues to grow.

The Company's own Adjusted RoE metric, which the Company states corrects for this and other acquisition-related intangible effects, shows a much steadier picture (20.02% to 23.05% to 20.70%), and investors should weight this adjusted figure more heavily than the unadjusted RoNW when assessing underlying capital efficiency.

Net working capital days have risen from 152 to 210 across the 3 years, which the Company attributes to increased inventory holding from customisation requirements and the integration of Marathon Heater and its recent international acquisitions, a plausible, disclosed explanation tied to the Company's inorganic growth rather than a standalone operational concern.

How Does It Compare to Peers?

The RHP states plainly, per the F&S Report, that there are no listed companies in India or outside India operating across the same combination of segments (temperature sensing solutions, electrical heating solutions and specialized cables) as the Company, and separately confirms there is no Industry Peer Group P/E ratio available for the same reason.

This places Tempsens Instruments alongside a small number of other companies in this report series, such as Aegeus Technologies and Anawil Wire and Engineering, where no meaningful peer benchmark exists.

In the absence of a peer table, the Company's own 3 year trend, set out in Section 4 above, and its independently verified market leadership in temperature sensors specifically, are the primary available reference points for assessing this business.

Key Risks

l The Company's headline RoE and RoNW have declined sharply across the disclosed track record (from over 20% in FY24 to roughly 13.5% in FY26), driven substantially by a one-time, disclosed net worth increase (Rs.1,901.99 million) from the Marathon Heater amalgamation in FY25; while the Company's own Adjusted RoE metric shows a steadier picture, investors relying on the unadjusted headline figures should understand this structural distortion before drawing conclusions about capital efficiency trends.

l Significant goodwill (Rs.1,061.28 million) was recognised from the Marathon Heater amalgamation as a one-time Fiscal 2025 event, plus further, smaller goodwill from FY26 acquisitions (Tempsens GmbH, Tempsens Measurement and Control); the Company itself cautions that this goodwill recognition is not indicative of recurring profitability and may not repeat in future periods.

l The Company is unable to trace certain historical corporate records (including a 1990 Form-32 director appointment filing and a 2004 Form-2 bonus issue filing) and has identified discrepancies in certain other filings (including an incorrect equity share subscription figure recorded at incorporation and an incorrect NCLT order date recorded in a Form INC-28); the Company has engaged an independent Practicing Company Secretary for a search and notified the relevant Registrars, but cannot assure no future regulatory action will arise.

l Net working capital days have risen substantially (152 to 210 across the 3 disclosed years), attributed to increased inventory holding tied to customisation requirements and the integration of recent acquisitions; continued increases could strain working capital and increase reliance on financing.

l Business is dependent on Projects and OEM revenue (63.99% to 69.16% of revenue across the 3 disclosed years), and the Company's manufacturing is significantly concentrated in Udaipur, Rajasthan, exposing it to regional operating and disruption risk.

l The Company has recently expanded internationally through the acquisition of a controlling stake in Tempsens Instruments GmbH, Germany (which itself has a Polish subsidiary), introducing cross-border integration, currency and regulatory complexity to the existing business.

l There have been delays in payment of statutory dues by the Company and its Subsidiaries across Fiscal 2024 through Fiscal 2026, and certain Subsidiaries have incurred losses in recent fiscal periods and may continue to do so.

l The Company depends on a limited group of suppliers without definitive long-term supply agreements for raw materials, and derives a meaningful share of revenue from outside India (21.49% to 28.52% across the 3 years), exposing it to exchange rate fluctuations.

l The Company's Registered Office, Corporate Office and manufacturing facilities are significantly concentrated in specific locations, and it requires various licenses, permits and approvals in the ordinary course of business.

l There is outstanding litigation involving the Company, Subsidiaries, certain Promoters, Directors, Key Managerial Personnel and Senior Management, and the Company has entered into related party transactions in the ordinary course of business.

l The Company's customers impose stringent quality and delivery performance requirements, and under-utilisation of manufacturing capacity (existing or newly expanded) could affect financial performance.

l The Company's ability to protect its technical know-how and intellectual property, and to achieve desired outcomes from its research and development investments, are both disclosed as standalone risks in a technically differentiated manufacturing business.

Positives to Note

l The Company holds a genuinely independently verified (F&S Report) market leadership position as India's largest manufacturer of contact and non-contact temperature sensors by revenue, and one of the largest electrical heater manufacturers in the country.

l Revenue and profit have both grown substantially and consistently across the disclosed track record (27.23% revenue CAGR and 31.79% PAT CAGR, FY24 to FY26), with EBITDA margin remaining healthy throughout (21.98% to 25.45%).

l The Company has successfully diversified its product mix through disciplined, disclosed inorganic growth: Electrical Heating Solutions grew from just 3.90% of revenue in FY24 to 20.70% in FY26 following the Marathon Heater amalgamation, reducing dependence on the core Temperature Sensing segment alone.

l The Company's own Adjusted RoE metric, which corrects for the one-time net worth effect of the Marathon Heater amalgamation, shows a much steadier and more favourable capital efficiency trend (20.02% to 23.05% to 20.70%) than the unadjusted headline RoE figures alone would suggest.

l The Company maintains conservative leverage throughout the disclosed track record (Debt-Equity ratio of 0.15 to 0.16 times in every year), leaving meaningful balance sheet capacity even as it pursues acquisitions and capacity expansion.

l The Company has proactively and transparently disclosed its untraceable historical records and filing discrepancies with specific detail (including engaging an independent Practicing Company Secretary and formally notifying the relevant Registrars), rather than providing only a general or vague disclosure.