Indigo Paints is one of the fastest
growing paint companies and bags a place amongst the top 5 paint companies in
India. Indigo Paints IPO will be open for subscription on 20th
January and will last till 22nd January. Price band of per share is
valued at RS 1,488-1,490. The issue size is expected to be approximately Rs
1,176 Crores out of which Rs 300 crore consists of fresh issue and Rs 876
crores for offer for sale (OFS). Money received under OFS will go to
shareholder selling it and no proceeds would be received by the company.
50 percent of the issue size is
allocated for qualified institutional buyers (QIBs), 35 percent is reserved for
retail investors, 15 percent is reserved for non-institutional bidders, and up
to 70,000 equity shares are reserved for employees who will earn a discount of
Rs 148 per share on the bid price.
At a CAGR of 42 percent during FY2010-FY2019,
Indigo''s revenue rose considerably compared to the mere 12-13 percent growth in
the same era by the top four paint manufacturers. Indigo managed to report a
good sales growth of 16 percent even during FY2020, when all businesses were
affected by the outbreak of Covid-19. Indigo would be a debt-free company after
the IPO. Although there are 12-15 sub-brands for large paint players, Indigo stalwartly
adopted the one-brand strategy.
The counter is overvalued compared to
its listed peers such as Asian Paints and Berger Paints. Investors can take a
spot in the script and book profits at the time of listing if allocated and can
later add the counter at dips in lots.