Indigo Paints block deal: 25% equity changes hands; shares drop 3.5%

Shares of Indigo Paints were trading around 3.5% lower at ₹1,485.65 apiece in the early trade on the BSE on Friday, September 6, after news reports said that 1.2 crore shares, or 25% equity, of the company changed hands in a block deal. The large trade took place at an average price of ₹1,493 apiece. 

The size of the deal was reported to be ₹1,792 crore.

Earlier, there were reports that Peak XV Partners Investments (formerly Sequoia India) had launched a block deal to raise around ₹750-₹800 crore by selling a part stake in Indigo Paints. 

The report further said that the floor price of the block deal was ₹1,470 per share, a discount of 4.6% to the closing price of Indigo Paints on September 5. Jefferies, the investment bank, was acting as the advisor on the deal, it added. 

The paint company reported a 15.59% decline in consolidated net profit to ₹26.20 crore in Q1 FY25 as compared to ₹31.04 crore in Q1 FY24. However, revenue from operations increased 7.81% YoY to ₹310.96 crore in Q1 FY25. Profit before tax stood at ₹35.69 crore in the quarter ended 30 June 2024, down 15.70% from ₹42.34 crore posted in same quarter last year.

During the quarter, the company's EBITDA slipped 3.46% to ₹47.4 crore in Q1 FY25 as compared to ₹49.1 crore posted in Q1 FY24. Indigo Paints made a strong debut on the bourses in 2021. Shares of the company got listed at a 75% premium over its issue price of Rs 1,490. The stock gained 09.3% to close at 3,118.65.

The company's IPO was overall subscribed 117 times.

About Indigo Paints

Incorporated in 2000, Indigo Paints is the fastest growing amongst the top five paint companies in India, with a larger presence in Tier-III and IV towns and rural areas as well as a strong portfolio of differentiated products.

The company has three manufacturing facilities in Jodhpur, Kochi, and Pudukkotai (TN) with a licensed capacity of 1.02 lakh kilolitres per annum (KLPA) and average utilisation of around 48% as of FY20.