Delta Investment Advisors

Tempsens Instruments (India) Limited

Tempsens Instruments (India) makes industrial temperature sensors, electrical heaters and specialised cables. It is India's largest temperature sensor manufacturer and the only domestic producer of non-contact sensors (FY26) (F&S report). It began as the temperature sensing arm of Pyrotech Group, an Udaipur based group founded by four engineers in 1976. Tempsens was incorporated in 1990 and took over the sensing business in 1994. Temperature sensing is 45% of revenue, cables 35% and electrical heating 21%. It runs 15 manufacturing units and serves over 3,800 customers globally (Domestic revenue : 71% ,Exports : 29%).

DRHP filed: September 29, 2025

IPO open & close: August 20, 2026 to August 24, 2026 (anchor book August 19, 2026)

Listing date: August 28, 2026 (BSE and NSE)

BRLM: ICICI Securities Limited and JM Financial Limited

Auditor: Walker Chandiok & Co LLP (predecessor joint statutory auditor: Bansi Lal Shah & Co.)

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Tempsens Instruments is a beautiful story of a completely bootstrapped company built over 50 years. It leads India's temperature sensor market (10.5% share), a category global suppliers ran for decades and where their share has slipped from 75% in FY18 to 59% in FY26. Its customers grew from 2,600 to 3,800 in two years with top 20 relationships averaging 10 years. Revenue compounded 26% to INR 445 cr over FY21-26. Operating margin expanded from 19.9% to 22.5% across FY24-26. Growth rests on industrial demand and displacing global suppliers. It is also expanding into adjacent segments such as electrical heating and specialised cables. At an IPO ask of 35.4x FY26 P/E and 24.3x EV/EBITDA the valuation looks a little expensive, and that growth will need to be demonstrated to justify it. We will actively track the company.

One can expect good listing gains as per current GMP ~108% (24 Aug 2026), provided the GMP sustains.

Tempsens is the largest domestic manufacturer of temperature sensors, holding 10.5% of India's INR 1,880 cr market as of March 2026, a position built over five decades of steady capability addition. Global brands such as WIKA and Endress+Hauser have ceded ground through this period, from a cumulative 75% of the market in FY2018 to 59% in FY2026, while organised Indian players doubled from 15% to 31%. Tempsens is also the only Indian producer of non-contact sensors, with 21.3% of that 220 cr subsegment (F&S report).

The temperature sensor segment contributed INR 197 cr (44.6%) of FY26 revenue. Virendra Rathi co-founded Pyrotech Group in Udaipur in 1976 with three other engineers, making thermocouples and RTDs. Tempsens Instruments was set up separately in 1990 and in 1994 bought out M/s Tempsens, an instruments partnership going since 1984 that Rathi was a partner in. So the sensing business he had been in since the 1970s ended up inside the company he built.

The company never raised outside equity, funding 36 years of growth on accruals and bank debt. WhiteOak Capital is the only institutional holder, having bought 2.50% for 50.0 cr in December 2025 (valuing equity at ~2,000 cr in the secondary transaction) from 4 Talesara family members and co-founder Nirmal Pande. The OFS comes entirely from them only (Talesara family & Nirmal Pande). Rathis are not selling in OFS and they will retain 52.9% stake post-offer. Talesaras stake to halve from 34.01% to 16.40% and Pande falls from 8.49% to 2.43% post-offer.

Temperature sensors are the devices that detect high temperatures in furnace, reactor or pipeline and they sit in positions where a wrong reading is a safety event. Buyers therefore run long qualification cycles, send their own inspectors to witness testing before dispatch, and rarely switch once a supplier is approved. The top 20 customers average 10 years of association, the longest at 23 years. The customer base has grown from 2,600 (FY24) to 3,800 (FY26).

Tempsens grew revenue at 26% CAGR over 5 years, from INR 138 cr in FY21 to INR 445 cr in FY26. Its core segment (Temperature sensors) growth was modest, at 6% in FY25 and 13% in FY26. Metal, its largest end market in FY24 at 24.48% of revenue, has fallen to 19.68% and declined in absolute terms in FY26, as steel industry utilisation slipped below 80% for the first time in four years on cheap Chinese imports (ICRA). F&S's report forecasts growth at 8.9% CAGR for the India market to FY2031.

Electrical heating was 20.7% of FY26 revenue. It competes against burning fuel, still how most plants heat furnaces, boilers, reactors and dryers. Fossil fuels held 74.9% of the global industrial heating equipment market in 2025 (Grand View research). Electric heating has been slow to displace combustion in large process plants, especially in India, with high upfront capital costs and power tariffs above fuel cited as the constraints.

Specialised cables were INR 153 cr, or 34.71% of FY26 revenue. F&S sizes India's specialised cable market at INR 12,800 cr, but 58% of that is LT and LV power cable and 13% control cable, categories Tempsens does not sell but belong to large scale players : Polycab, KEI, RR Kabel, Havells and Finolex. The large players do compete where Tempsens operates: KEI's own catalogue lists instrumentation and thermocouple extension cables, and Polycab sells them too. Its narrower differentiation is mineral insulated cable and alloy conductor, made in-house and fed into its own sensors, where the competition is instrumentation specialists rather than cable majors, with Thermo Cables of Hyderabad at INR 845 cr in FY25 the closest direct comparable.

FY25 revenue growth of 38% came mostly from an acquisition. Tempsens acquired Marathon Heater, which makes industrial heaters, thermal engineering products and process control solutions. It already held a minority stake, with promoters Virendra Prakash Rathi and Vinay Rathi controlling the rest, and Marathon merged in with effect from April 2024. Of the INR 104 cr revenue increase in FY25, INR 73.5 cr was contributed from Marathon only. The company is also evaluating opportunities in Saudi Arabia, the United States and Brazil, and adjacent areas such as boilers, furnaces and thermal systems.

Gross Margins improved from 39% (FY24) to 47% (FY25) & 46% (FY26) possibly on better export mix and increase in share of specialized cables & Electrical heating solutions. The operating margins increased from 19.9% (FY24) to 23.9% (FY25) & 22.5% (FY26). Backward integration extends from melting its own thermocouple and heating alloy in vacuum induction furnaces to drawing the wire, making its own mineral insulated cable, then machining, assembling and calibrating in-house.

Three generations run the business. V P Rathi is Chairman at 77 and his son Vinay Rathi (52) joined the company in 2003 and became MD in August 2025. Two of the three divisional heads are the Chairman's nephews: Hemant Rathi runs the sensor division and Akhil Maheshwari the heater division. Vinay Rathi's son Aryan joined in May 2024 as Lead of Global Sales.

At INR 2,515 cr market cap (post-offer), the issue asks for 35.4x FY26 earnings and 24.3x EV/EBITDA, a 21% premium per share to the INR 2,000 cr valuation WhiteOak paid 8 months earlier. Of the INR 95 cr Fresh issue, INR 18.1 cr is capex split between Unit VI for heating and Unit IV for cables, against INR INR 55.0 cr repaying revolving working capital lines.

Business

Tempsens makes the equipment industrial plants use to measure temperature, generate heat, and carry signals and power in conditions that destroy ordinary components. FY26 revenue was INR 445 cr with EBITDA of INR 113 cr and PAT of INR 71.1 cr. Projects and OEM supply tied to industrial capex was 67.55% of FY26 revenue; replacement and maintenance supply to plants already using its parts was 32.45%.

Revenue runs across three verticals. Temperature sensing, the measurement business, was INR 197 cr or 44.59% of FY26 revenue, down from 60.58% in FY24. Specialised cables, wires built to survive heat, fire and electrical interference, was INR 153 cr or 34.71%. Electrical heating, covering heaters and industrial furnaces, was INR 91.3 cr or 20.70%, up from 3.90% in FY24 on the Marathon Heater amalgamation.

The main products are thermocouples and RTDs, which turn heat into a signal the control room can read; thermowells, the protective sleeves that let a sensor sit inside a corrosive process and be swapped out without shutting the plant down; infrared pyrometers and thermal imagers for molten metal and moving steel; cartridge, band and process heaters along with industrial furnaces; and mineral insulated, heat trace and instrumentation cables, plus nickel alloy conductor wire.

Customers are plant owners, machine builders, EPC contractors and PSUs across petrochemical (21.45% of FY26 revenue), metal (19.68%), power (12.27%), defence and nuclear (6.95%) and glass (6.74%). India was INR 315 cr or 71.48% of FY26 revenue and exports INR 126 cr or 28.52% across more than 80 countries. Also, Revenue from top 10 customers was 19% of revenue in FY26. 60% of FY26 revenue came from customers buying more than one product line.

The company melts its own thermocouple and heating alloy in vacuum induction furnaces, draws it into wire, packs it into magnesium oxide filled metal sheaths to make mineral insulated cable, then machines, assembles and calibrates in-house against a NABL accredited lab covering -196 to 1600 degrees Celsius for contact and up to 3000 degrees Celsius for non-contact measurement.

Raw materials are metals and insulators. Copper and nickel were 26.05% of FY26 purchases of 261 cr, metal bar and plate 13.11%, insulation 9.54% and precious metals 7.33%. Sourcing is 80.36% domestic and 19.64% imported, up from 14.24% in FY24. The company claims to have fifteen manufacturing plants, ten of them in Udaipur with several sharing premises.

The group holds six subsidiaries and four joint ventures across India, UAE, Germany, Poland, Indonesia and South Korea, with control shared in several cases: Micro-Epsilon holds 49.99% of pyrometer subsidiary Pyrosens with veto rights over capex and budgets. Four acquisitions closed in 24 months, creating goodwill of 108 cr and acquired intangibles of 46.4 cr, together 31% of net worth attributable to owners.

Promoters and Leadership

Virendra Rathi co-founded Pyrotech Group in Udaipur in 1976 with three other engineers, making thermocouples and RTDs. Tempsens Instruments was set up separately in 1990 and in 1994 bought out M/s Tempsens, an instruments partnership going since 1984 that Rathi was a partner in. So the sensing business he had been in since the 1970s ended up inside the company he built. Virendra Rathi is Chairman at 77 and his son Vinay Rathi (52) joined the company in 2003 and became MD in August 2025. Two of the three divisional heads are the Chairman's nephews: Hemant Rathi runs the sensor division and Akhil Maheshwari the heater division. Vinay Rathi's son Aryan joined in May 2024 as Lead of Global Sales.

Vinay Rathi, 52, an engineer from Manipal with a management degree from TAPMI, joined in 2003, became a director in 2019 and took over as Managing Director in August 2025. His father V P Rathi, 77, remains Chairman and Executive Director.

Shareholding Pattern

Promoters hold 46.13% and the promoter group 34.39%, taking family holding to 80.51% pre-offer. Another 8.49% sits with Ankit Talesara, a non-executive director who falls outside the promoter group, and 8.49% with 1976 co-founder Nirmal Kumar Pande.

The company has never raised external equity. WhiteOak Capital India Opportunities Fund is the only institutional holder at 2.50%, bought for INR 50.0 cr at INR 247.94 per share in December 2025 from the Talesara branch and N K Pande. It was a pure secondary with no money reaching the company, and WhiteOak is not selling in the offer.

Issue Details

Fresh issue size - Amount → INR 95.0 cr ; To be utilized in -

Capital expenditure at Unit VI (electrical heating solutions) and Unit IV (specialised cables) → INR 18.1 cr
Pre-payment or scheduled re-payment of certain outstanding borrowings → INR 55.0 cr
General Corporate Purposes → INR 21.9 cr

Offer For Sale size - Amount → INR 555 cr ;

Amit Talesara (promoter group) will sell 4,815,543 shares, 70.27% of his pre-IPO holding, taking his stake from 8.50% to 2.43%.
Nirmal Kumar Pande (1976 co-founder) will sell 4,814,537 shares, 70.27% of his pre-IPO holding, taking his stake from 8.49% to 2.43%.
Chandra Prakash Talesara (promoter group) will sell 3,787,720 shares, 55.29% of his pre-IPO holding, taking his stake from 8.49% to 3.65%.
Ankit Talesara (non-executive director) will sell 3,787,720 shares, 55.29% of his pre-IPO holding, taking his stake from 8.49% to 3.65%.
Puneet Talesara (promoter group) will sell 1,294,480 shares, 20.32% of his pre-IPO holding, taking his stake from 7.90% to 6.05%.
Promoter and promoter group holding falls from 80.51% pre-offer to 65.67% post-offer.

Financials