INDIGO PAINTS LIMITED IPO

Indigo Paints started in the year 2000. The company started its business with the manufacturing of lower-end cement paints. After some time, it expanded its range to cover more segments of water-based paints like Distempers, Primers, Exterior Emulsions, Interior Emulsions, etc. From an early stage, the company expanded its footprints across the country with its extensive distribution network. Now, Indigo paints is one of the strongest players in the Indian Paint Industry known for offering innovative & unique products in the industry.

Indigo paints is the 5th largest company in the Indian Paint Industry as per the sales numbers for FY 2019-20. The company has expanded its business across the country with a distribution network in 27 states and 7 UTs.

Indigo paints have 74% of the market share in India in the segment of decorative paints which include wall finishes for interior & exterior use, wood finishes, enamels, primers, etc. The company’s decorative paints segment has grown at a CAGR of 11.5% from the fiscal year 2014 to 2019.

The philosophy of the company has been to set new strategies, market research fundamentals, and innovative product development to stand out in its own class from its competitors.

The Sequoia Capital-backed Indigo Paints has received approval from SEBI to raise around Rs.1,000 crores through fresh issuance of Rs.300 crores worth of shares and an offer for sale of 58,40,000 equity shares by PE Firm Sequoia Capital through 2 of its funds.

Promoters of the company are Hemant Jalan, Anita Jalan, Parag Jalan, Kamala Prasad Jalan, Tara Devi Jalan, and Halogen Chemicals Private Limited.

Strengths of the company:

The company has a good track record of consistent growth in the industry.
The company offers differentiated products leading to good brand recognition and expansion through a wide range of paint products.
The company has an extensive distribution network for good brand penetration.
The company has a management team of well-qualified experts & professionals enabling sound management.
The company is the fastest-growing company among the Top 5 companies in the Indian paint industry.
It has strategically located manufacturing facilities with proximity & easy access to raw materials for its production activities.

Purpose of the IPO:

To purchase tinting machines and gyro shakers.
To make repayments or prepayment of all or some portion of its borrowings.
For funding the capital expenditure used in the expansion of the existing manufacturing facility in Pudukkottai, Tamil Nadu by setting-up an additional unit along with the existing facility.
To meet the general corporate purposes.

Financial Performance of the company:

	6 month period ended 30th September 2020	FY 2020	FY 2019	FY 2018
Total Revenue	260.24	626.43	537.26	403.10
Total Expenses	225.01	559.00	503.24	389.23
Profit after tax	27.20	47.81	26.87	12.86
Total Assets	411.29	421.95	373.18	297.39

*All the values are in crores and as per DRHP.

Valuation of the company:

	6 month period ended 30th September 2020	FY 2020	FY 2019	FY 2018
Basic Earnings per Share (EPS)	6.03	10.61	5.98	2.88
Diluted Earnings per Share (EPS)	5.97	10.49	5.90	2.82
Return on Net Worth (%)	12.12%	24.27%	18.22%	10.09%
Net Assets Value per Equity Share	49.75	43.69	32.84	28.53

*as per DRHP

Indigo Paints DRHP

IPO details:

Face Value	₹10 Per Equity Share
Market Lot	10 Shares
Minimum Order Quantity	10 Shares
Price Band	₹1,488 - ₹1,490 Per Equity Share
Issue type	Book Built Issue IPO
Issue Size	Approx ₹1,000 Crores
Fresh Issue	₹300 Crores
Offer for Sale	58,40,000 Equity Shares
Listing	BSE, NSE

Important IPO dates:

Open Date	20th January 2021
Close Date	22nd January 2021
Allotment Date	28th January 2021
Refunds	29th January 2021
Credit of shares to Demat Account	01st February 2021
Listing Date	02nd February 2021

Allocation Quota:

Category	Portion
Qualified Institutional Buyers (QIBs)	Not more than 50%
Non- Institutional Buyers (NIIs)	Not less than 15%
Retail Investors	Approx 35%

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