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Indigo Paints Ltd IPO

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Indigo Paints is coming up with Initial Public Offering of about ₹1,176.00 Cr. The issue will open on 20 January and will be closing on 22 January. Indigo Paints is an innovative paint company which offers a wide range of interior & exterior wall paint colours, enamels & wood coatings for homes & offices.

The total issue size is ₹1,169cr, which consists of Fresh Issue of ₹300cr and Offer for Sale of ~0.58cr shares aggregating to ₹869cr at the upper end of the price band. The offer includes reservation of up to 70,000 equity shares for subscription by eligible employees at discount of ₹148 per share. The proceeds from the fresh issue are proposed to be utilized towards:

% Shareholding

Pre-offer

Post-offer

Promoter Group

60.05

54.00

Public

39.95

46.00

Total

100%

100%

Post Issue percentage is at upper price band 


Objects of the Issue:

  • ₹150cr for funding capital expenditure for expansion of the existing manufacturing facility at Pudukkottai Tamil Nadu by setting-up an additional unit adjacent to the existing facility;
  • ₹50cr for purchase of tinting machines and gyroshakers
  • ₹25cr for repayment/prepayment of all or certain of their borrowings; and
  • Balance for general corporate purposes

Indigo Paints Ltd IPO Subscription Details

Company

Indigo Paints Ltd

Issue Type

Book Building

Issue Size

₹1,176.00 Cr

Lot Size

10 Equity Shares

Open Date

20 January

Close Date

22 January

Offer Price

₹1488 - 1490 per Equity Share

DRHP

Click Here

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About Indigo Paints Ltd IPO

Indigo Paints (Indigo) is the fifth-largest decorative paints company in India, with a larger presence in tier 3/4 towns and rural areas coupled with a strong portfolio of differentiated products. It has clocked the fastest organic revenue CAGR of 29% in the past five years among the top five decorative paints companies in India.

The company was incorporated as “Indigo Paints Private Ltd” at Pune on March 28, 2000 and was later converted into a public limited company in August 2000. In order to expand footprint in southern India and gain access to solvent-based paints, Indigo acquired Kerala-based paints player Hi Build Coatings in FY16, which had a turnover of ₹123cr in FY16. With this acquisition, Indigo also gained access to manufacturing facilities in Kochi and Pudukkottai.

South India constituted 46%, while East India constituted 29% of the company’s sales in FY20. It is the #3 player in Kerala, close on the heels of the #2 player (Berger Paints) and almost twice the size of the #4 player (Kansai Nerolac) in that market. Indigo derives 45% of its sales from emulsion paints. Also, it has a distinguished portfolio of differentiated products based on end-use and value-added properties, which include products such as floor coat emulsion, bright ceiling coat, tile coat, dirt-proof and waterproof exterior laminate. As of March 2020, Indigo has three manufacturing facilities, one each at Jodhpur, Kochi, Pudukkotai, with a combined capacity utilization of ~48%.


Financials

Particulars

FY19

FY20

FY21E

H1FY22E

H1FY23E

Revenue (₹Cr)

536

625

687

894

1,072

EBITDA(%)

10.1

14.6

17.0

20.2

21.3

EPS(₹)

6.0

10.5

17.1

25.7

32.6

ROE(%)

19.8

27.8

21.0

19.1

19.9

EV/EBITDA

126.8

74.0

56.9

36.8

28.6

Source: RHP, 5paisa Research, Note: Priced on the upper price band at ₹1,490

Key Points

The fifth-largest Indian decorative paints company:

 Incorporated in Mar-2000, Indigo has rapidly scaled up, logging a turnover of Rs6.2bn in FY20 and delivering an organic revenue CAGR of 29% (48% incl. acquisitions) in the past five years. It has 2% market share and is at the #5 spot in a highly competitive and oligopolistic decorative paints industry. Indigo Paints derives ~46% of its sales from southern India and commands the #3 position in the state of Kerala. It has built a network of ~11,000 dealers and ~4,600 tinting machines.

A solid growth model:

 Indigo Paints has been able to stand out in an industry with a cluttered tail, via development of differentiated products (29% of sales) catering to specific consumer needs, supported by ad spends similar to that of major players (except Asian Paints) on an absolute basis, despite its smaller size. A focus on smaller towns and cities helps it to grow faster and make inroads in the trade, which is a highly daunting task for any new company to achieve in big cities. The tinting machine-to dealer ratio for Indigo is 0.38 vs. ~0.65 for the top-three players; Indigo plans to focus on ramping up this ratio, as the addition of a tinting machine more than doubles the sales from a dealer.

Outlook & Valuation:

As per our estimates, Indigo Paints would yield a valuation of 46x FY23E EPS (on upper price band) vs. 63x for Asian Paints and 77x for Berger Paints. A combination of higher growth and lower valuations makes for an exciting investment opportunity.

We recommend Subscribe to the IPO, given favorable growth-valuation equation.

How to apply IPO on 5paisa app?

  • Login to your 5paisa Mobile Trading App and select Indigo Paints Ltd IPO in the current IPO section
  • Enter the number of lots and price at which you wish to apply for
  • Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange
  • You will receive a notification to block funds in your UPI app
  • Approve the block request

Indigo Paints Ltd IPO Frequently Asked Questions

Indigo Paints is one of the fastest growing paint company. Indigo Paints IPO is a main-board IPO of  face value ₹10 aggregating up to ₹1,000 Crores.

You can apply for the Indigo Paints IPO? using any supported UPI apps. To Apply on 5paisa App follow the procedure mentioned above. For further details Click Here.

Indigo IPO will open on January 20, 2021.

Indigo Paints IPO Lot size is 10 equity shares, that means you can apply for one lot consisting 10 equity shares.

Shares of Indigo Paints will be getting allotted on 28th January,2021.

Indigo Paints Shares will be getting listed on 02 February, 2021..

Here is the minimum investment calculation of Indigo Paints IPO
Lot size – 10 * Issue Price ₹1,490 = ₹14,900
Hence the minimum investment amount required to invest in Indigo Paints IPO is ₹14,900. As per the maximum limit that is allowed by SEBI you can apply for 13 lots.

No, one bank account one IPO application is allowed.

Cut off Price for Indigo Paints IPO is ₹14,900


Read more IPO FAQs

Contact Details of Indigo Paints Ltd IPO

Company Contact Information

Indigo Paints Ltd IPO
103 Montreal Baner Road,
Behind Mauli Petrol Pump,
Pune, Maharashtra 411045.

Phone: 91-20-66814300
Email: info@indigopaints.com
Website: http://www.indigopaints.com/

Indigo Paints Ltd IPO Register

Link Intime India Pvt Ltd

Indigo Paints Ltd IPO Lead Manager(s)

  • Edelweiss Financial Services Ltd
  • ICICI Securities Ltd
  • Kotak Mahindra Capital Company Ltd

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