Indigo Paints IPO A Success Right Before It Opens Up For Subscription

Indigo Paints’ Rs 1,170.16 crore initial public offering (IPO) opens fronting subscription now i.e. January 20, 2021. This is the succor populace notify to bang the primary markets inwards the new year, afterward the on-going Indian Railway Finance Corporation IPO. The initiatory public issue of Indigo Paints will stay open facing bid price until January 22, inwards the price banding of Rs 1,488-1,490 a share.

The shares of Indigo Paints parting move listed on the BSE Sensex and NSE Nifty on February 2, 2021. Indigo Paints IPO consists of new information of stocks aggregation to Rs 300 crore and an offer-for-sale of upwards to 58,40,000 equity shares forth private equity business firm Sequoia Capital and Hemant Jalan. Investors can bid facing a minimal 1 lot of 10 shares and in multiples, extending upwards to 13 lots. The Pune-headquartered Indigo Paints will utilize the IPO compensation to amplify its manufacturing plant at Pudukkottai in Tamil Nadu, acquire tinting machines and gyro shakers, and retort/prepay borrowings. Indigo Paints produces an array of enhancive paints at its manufacturing facilities in Rajasthan, Kerala, and Tamil Nadu.

Analysts reports that possess inclined a ‘subscribe’ paygrade facing the IPO display that the demand, consequently far, is favorable justified because the Pune-based paint manufacturer has inclined mingy rivalry to mighty bigger peers like Asian Paints and Berger Paints in current years. Indigo Paints is a comparatively puny performer with a 2% commercialized share simply its benefit has full-grown importantly, almost four propagation in the last 3 years.

Discounted Valuation:



At the upward end of the IPO price banding, Indigo Paints is offered at 98.5 multiplication its remuneration, as compared to its alternative listed peers like Asian Paints, Berger Paints, and Kansai Nerolac. The mark to salary ratio is the fiscal ratio that helps decide a stock’s market estimate compared to the company’s profits. The P/E ratio shows what the commercialize is unforced to remunerate facing a stock-based along with its lucre.

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Good Financial Position:

Indigo Paints’ gross and gainfulness hold systematically improved allover the concluding few years. HDFC Securities, in its IPO, portray, renowned that the convoy has ‘smartly executed its gross ramp-up’ and that reflects in the company’s upwardly basics. The company’s gross from operations has full-grown at a compound yearly growth rate (CAGR) of 41.9% betwixt fiscal years 2010 and 2019, compared to the array of 12.1% to 13.1% recorded forth the peak four paint companies in India.

Peers Of The Growing Sector:

Indigo Paints is from the sphere that is equanimous to win allover the appearing years, disrespect altogether the challenges that may seize across the universe. According to the ICICI Securities describe, the Indian paint diligence is preciously at ₹54500 crores, and it is expected to be growing at 12% CAGR in the marching 5 years. The ornamental paint section, which constitutes 74% of summate paint sales, is probably to obtain at CAGR 13% backed by reduction repainting wheel, emerging urbanization, and ambition point of middle-class households in India. The description highlighted that government schemes like Pradhan Mantri Awas Yojana, smart city development, Real Estate development, and others vigor feat out in its advancement in the adjoining time to come.

Some Risk Factors To Consider Before Investing:


1) Albeit the paint manufacture is deemed to grow, what stiff fascinating is the cut-throat rivalry inwards the industriousness.

2) Paint companies hold been anecdotal of the biggest beneficiaries of accessible raw material prices resulting in critical rotten leeway elaboration. According to ICICI Direct describe, any principal up activity in extreme prices from the recent grade possesses a vast peril at the depraved borderline.

3) A vital piece of gross sales facing the escort is derived from Kerala, and any longer opposing developments in this commercialize could adversely influence the affair.

4) According to HDFC Securities, the convoy does not possess long-run agreements with its suppliers facing raw materials, and unfitness to acquire the coveted fortuity, amount of its raw materials in a well-timed mode and at fairish costs may possess a corporeal opposing execute within its affair.

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