Key highlights:
Price band: ₹1,488-1490
Lot size: 10 shares
Issue opens on: 20 January 2021
Issue closes on: 22 January 2021
Basis of allotment date: 28 January 2021
Initiation of refunds: 29 January 2021
Credit of shares to Demat account: 1 February 2021
Expected listing date: 2 February 2021
Registrar: Link Intime India Private Limited
Contact: Shanti Gopalkrishnan, +91 22 4918 6200
Email: indigopaints.ipo@linkintime.co.in
Click here to apply for the IPO
Barely has 2021 started and we’re already into the first double-IPO week of the year! Earlier this week, the IRFC IPO opened the innings and now, Indigo Paints is going public. For those of you who don’t know this company, there is an ad featuring M.S. Dhoni alongside a colourful, animated zebra. We tell you what the company and its public offer are all about.
About the company
Among paints companies, Asian Paints, Berger Paints and Kansai Nerolac are surely names that you’re familiar with. Some may even have heard of Akzo Nobel. As of 2019, these four companies control about 61% of the nearly ₹40,300 crore decorative paint market. Asian Paints alone commands 42% market share. Indigo Paints comes fifth in the list with a 2% market share.
The company started operations in 2000 and caters to categories such as interior and exterior emulsions, wood coatings, primers and ceiling and floor coats. As of 30 September 2020, the company’s distribution network spans 27 states and seven union territories.
It owns three manufacturing facilities located in Pudukkottai (Tamil Nadu), Jodhpur (Rajasthan) and Kochi (Kerala). The aggregate estimated installed production capacity from these three plants comes to 101,903 kilo litres per annum for liquid paints and 93,118 metric tonnes per annum for putties and powder paints.
For the past three years, the company’s financials have shown an uptrend. Revenue from operations stood at ₹401.4 crore (FY18), ₹535.6 crore (FY19) and ₹624.7crore (FY20). In the first half of FY21, the company posted a revenue of ₹259.4 crore. Like its revenues, Indigo’s profits too have risen consistently. For FY18, FY19 and FY20, it reported profits of ₹12.8 crore, ₹26.8 crore and ₹47.8 crore. If the company’s H1 profits of ₹27.2 crore for the current fiscal are anything to go by, it is on track to post growth in FY21 too.
The public issue comprises a ₹300 crore fresh issue and an offer for sale of 5,840,000 equity shares, through which its promoters Sequoia Capital and Hemant Jalan will sell their stake. Considering the upper end of the price band, the IPO will fetch the company about ₹1,170 crore.
Through the issue, Indigo Paints looks to fund the expansion of its existing manufacturing facility at Pudukkottai and purchase equipment such as tinting machines and gyroshakers. The raised funds will also be used to repay loans.
In the issue, the quota for qualified institutional buyers (QIB) has been capped at 50%. Further, not less than 15% of the offer shall be available for non-institutional investors, while 35% is allocated as retail quota.
To know more about the IPO, read its red herring prospectus here. You can subscribe to the IPO with Upstox here. Meanwhile, we’ll keep you posted on the latest information about this IPO and the public issues that follow. So, stay tuned!