Management

• Virendra Prakash Rathi: Chairman & Executive Director
• Vinay Rathi: Managing Director
• Ankit Talesara: Non-Executive Director
• Pratap Singh Talesara: Non-Executive Director
• Deepak Kabra: Independent Director
• Rishabh Verdia: Independent Director
• Bhagwat Singh Babel: Independent Director
• Ruchika Godha: Independent Director

Use of Proceeds

Tempsens Instruments (India) Limited proposes to raise Rs.95.0 crore through the Fresh Issue. After deducting offer-related expenses, the Net Proceeds will be utilised primarily for capacity expansion, debt reduction and general corporate purposes. The company has identified the following key objects:

• Capital Expenditure – Rs.18.13 crore: The company proposes to invest Rs.18.13 crore towards capital expenditure for its electrical heating solutions and specialised cable solutions verticals. The funds will be used to purchase new machinery and equipment and undertake civil and building work.
• Repayment/Pre-payment of Borrowings – Rs.55.00 crore: The company plans to utilise Rs.55.00 crore for the full or partial pre-payment or scheduled repayment of certain outstanding borrowings.
• General Corporate Purposes: The remaining Net Proceeds will be used for general corporate purposes, as approved by management from time to time.

Competitive Strengths

Largest Manufacturer of Contact and Non-Contact Temperature Sensors in India in Terms of Revenue and One of the Largest Manufacturers of Electrical Heaters in India with a Focus on Indigenisation resulting in High Entry Barriers

Tempsens is the largest manufacturer of contact and non-contact temperature sensors in India by revenue as of March 31, 2026, with an estimated 10.5% market share in the temperature sensor segment. It is also the only Indian manufacturer of non-contact temperature sensors, with around 21.3% market share. Its products are niche, customised and largely manufactured on a make-to-order basis, requiring detailed engineering, testing and customer-specific specifications. The company has also strengthened backward integration by manufacturing thermocouples and heating conductors in-house, reducing import dependence. Product certifications, long qualification cycles, field trials and stringent approval requirements create significant entry barriers and support customer retention.

Diversified Business Model with Broad Product Portfolio, Wide Industry Coverage, and Balanced Mix of Projects and MRO Revenue Tempsens has expanded its portfolio from seven categories in FY20 to 13 categories across three verticals in FY26, covering temperature sensors, specialised cables, conductors, electrical heaters, furnaces and calibrators. The company serves diverse industries including power, steel, oil & gas, cement, chemicals, plastics, automotive, defence and space. Its customer base increased from more than 2,600 in FY24 to over 3,800 in FY26, while the top 20 customers had an average association of 10 years. The business also combines project/OEM and maintenance, repair and operations (MRO) revenues, with FY26 contributing 67.55% and 32.45%, respectively, providing a balance between project opportunities and recurring replacement demand.

Established Research and Development Capabilities Enabling Customized, Critical Solutions and Innovation Tempsens has built dedicated research and development capabilities focused on developing customised thermal engineering solutions for complex industrial applications. As of March 31, 2026, its R&D team comprised 83 employees, supporting product development across thermal, mechanical and electrical technologies. The company and its subsidiaries and joint ventures had 12 patents in India, eight registered trademarks in India and 39 trademark registrations across overseas jurisdictions. Recent developments include fibre-optic temperature sensors, aerospace-grade cables and catalyst-bed heaters for space applications. Its R&D capabilities enable the company to address evolving customer requirements while creating differentiated products for specialised and high-entry-barrier applications.

Global Presence Through Strategic Alliances, Diverse Customer Base, Export Sales and Strong Long-Standing Customer Relationships Tempsens has developed a global operating footprint through subsidiaries, joint ventures and strategic alliances across the United Arab Emirates, Germany, Poland, Indonesia and South Korea. Together with its global distributors, the company has supplied products to more than 80 countries between April 2023 and March 2026. Its customer base spans multiple industries, while the top ten customers accounted for only 18.59% of FY26 revenue, indicating relatively low customer concentration. Cross-selling is another key strength, with revenue from customers purchasing products across multiple verticals reaching Rs.266.8 crore or 59.97% of FY26 revenue, up from 57.60% in FY24.

Integrated Global Operations Featuring Backward Integration, Digital Traceability, and Stringent Quality Control Tempsens operates 15 manufacturing units, including 10 in Udaipur and five overseas, supported by 28 distributors globally. Its backward-integrated manufacturing capabilities cover thermocouples, cables and electrical heaters, allowing greater control over alloy melting, wire drawing, fabrication, assembly and calibration. The company also uses semi-automated production lines and robotic welding for precision and efficiency. Digital traceability tracks raw materials through production and final product labelling, while a three-stage quality inspection process covers inward, in-process and outward checks. International certifications, including ISO, ATEX, IECEx, UL, CE and PESO, further strengthen its credibility in regulated and safety-critical industries.

Operations Led by the Promoters and Supported by an Experienced Management Team Driving Long-Term Business Growth Tempsens is led by a multi-generational promoter group comprising Virendra Prakash Rathi, Vinay Rathi and Pratap Singh Talesara, supported by an experienced management team. The second generation provides continuity in strategic direction, while the third generation is involved in global sales operations. Several key management personnel and senior executives have been associated with the company for an average of around 15 years, supporting institutional knowledge and customer relationships. The combination of promoter-led strategic continuity, experienced management, technical expertise and a skilled workforce provides the company with the capabilities to navigate evolving industrial requirements and pursue long-term domestic and international growth.

Key Risks & Concerns

Dependence on Key Product Verticals Tempsens remains dependent on its three core verticals—temperature sensing solutions, electrical heating solutions and specialised cables. In FY26, temperature sensing contributed 44.59% of revenue from operations, while specialised cables contributed 34.71% and electrical heating solutions 20.70%. Any slowdown in demand, adverse industry trends or loss of market share in any major vertical could materially affect revenue, margins and cash flows.

Intense Competition and Pricing Pressure The company operates in competitive markets with domestic as well as global players. Temperature sensing faces competition from established Indian manufacturers and multinational companies, while specialised cables and electrical heating solutions have several domestic suppliers. Larger competitors may possess stronger financial resources, technology, manufacturing capacity and distribution networks, potentially creating pressure on pricing, margins and market share.

Dependence on Imported Raw Materials and Machinery Although a majority of materials are sourced domestically, 19.64% of material procurement in FY26 was imported. Imports include materials and equipment from China, the Czech Republic, Germany, the United Kingdom and the United States. Supply-chain disruptions, geopolitical issues, changes in import duties, tariffs, foreign exchange movements or shipment delays could increase costs and disrupt production and customer deliveries.

Project-Based Business and Demand Volatility The Projects/OEM business generally involves large and sometimes one-time orders with long sales cycles, making revenue dependent on customer capital expenditure and project execution. Delays or cancellations of major projects can affect growth and capacity utilisation. Meanwhile, the MRO business provides recurring demand but generally consists of smaller orders and may not fully offset fluctuations in large project orders.

Acquisition and International Operations Risk Tempsens has expanded internationally through subsidiaries and joint ventures, including the acquisition of control in Tempsens Instruments GmbH, Germany, which also has a subsidiary in Poland. Integration of acquired businesses, differences in operating practices, regulatory requirements, foreign exchange movements and dependence on overseas subsidiaries or joint ventures could create execution and financial risks.

Regulatory, Litigation and Business Continuity Risks The company could face future legal or regulatory proceedings despite there being no material pending litigation involving its group companies. Adverse judgments could consume management time, require financial resources and affect reputation. Additionally, maintaining product certifications and meeting stringent customer qualification requirements remains important for its mission-critical applications.

Outlook and Valuation

Tempsens Instruments enters the next phase of growth with a strong positioning in temperature sensing, electrical heating and specialised cables. The company plans to expand established product lines such as process heating, conductors and infrared solutions while commercialising newer products through its 83-member R&D team. It is also targeting emerging applications including battery energy storage, green hydrogen, fuel cells, decarbonisation, defence, aerospace, metal recycling and nuclear power. Further capacity expansion, automation and deeper international distribution are expected to support growth. Its global manufacturing and subsidiary network should also aid exports and localisation across Europe, the Middle East, North America and other markets.

We believe Tempsens is well positioned to benefit from India’s industrial automation, manufacturing expansion and increasing localisation, supported by its niche product portfolio, technical expertise and strong market positioning. Its high entry barriers, diversified customer base and established presence across temperature sensing, electrical heating and specialised cables further strengthen the long-term growth outlook. However, the valuation leaves limited room for execution disappointments, while working-capital intensity, competition and the need to sustain growth and margins remain key monitorables. Nevertheless, the company’s strong growth profile, market leadership, technical capabilities and healthy balance sheet provide a favourable risk-reward proposition for investors with a long-term perspective. At the upper IPO price band of Rs.300, the issue is valued at around 37.3x on a post-issue basis, while the NAV stands at Rs.61.66 per share, reflecting a premium valuation. Accordingly, we recommend SUBSCRIBING the issue, with a focus on both potential listing gains and a medium- to long-term investment horizon.