Indigo Paints IPO from the fifth largest decorative paint maker is planning to raise up to Rs. 1,170 crore through an IPO, which opens on 20th Jan. and closes on 22nd Jan. 2021. The price band of Indigo Paints IPO is Rs. 1,488 – 1,490 per share. The Indigo Paints IPO represents 16.5% dilution. The issue comprises of fresh issue and offer for sale by Sequoia Capital and the promoters of the company.

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Indigo Paints IPO Details

Issue Period20 – 22 January, 2021
Issue DetailsFresh Issue: Equity Shares upto ₹ 300 Cr
 + Offer for Sale of 5,840,000 Equity Shares
Issue Size (₹ Cr)₹ 1,168 -1,169 Cr
Bid Lot10 Shares 
Price Band₹ 1,488 – 1,490
Employee ReservationUpto 70,000 Equity Shares
Employee Discount (₹)₹ 148/- Per Share
Issue Structure : 
QIB50% of the net offer 
NIB15% of the net offer 
Retail35% of offer (~ 2,724,198 Shares – ₹ 406 Cr)
Applications 1x Retail2,72,419
BRLMsKotak Mahindra Capital, Edelweiss Financial, ICICI Securities
RegistrarLink Intime India Pvt. Ltd.


  • ANCHOR ISSUE: Indigo Paints anchor issue got a good response and garnered ₹348 crore from anchor investors ahead of its IPO. A total of 23,35,020 shares were allotted to 25 anchor investors. Major anchor investors include Government of Singapore Investment Corporation, Goldman Sachs, Nomura, Government Pension Fund Global, Fidelity, HSBC, Mutual Funds like SBI, HDFC, ICICI Prudential , Axis and insurance companies like HDFC Life and ICICI Prudential Life.

About Indigo Paints Limited

  • Indigo Paints Limited was incorporated on March 28, 2000.
  • Indigo Paints is the 1st company to manufacture and introduce certain differentiated products in the decorative paint market in India, which includes their Metallic Emulsions, Tile Coat Emulsions, Bright Ceiling Coat Emulsions, Floor Coat Emulsions, Dirtproof & Waterproof Exterior Laminate, Exterior and Interior Acrylic Laminate, and PU Super Gloss Enamel.
  • The company has introduce differentiated products to create a distinct brand equity for their consumer brand of “Indigo”,.
  • Indigo Paints has created an extensive distribution network across 27 states and 7 union territories as of September 30, 2020, and has installing tinting machines across their network of dealers.
  • As of September 30, 2020, Indigo Paints owns and operates 3 manufacturing facilities located in Rajasthan, Kerala and Tamil Nadu.
  • The company intends to use IPO proceeds for repayment of debt of around Rs 48 core, financing the project cost for establishment of a new manufacturing facility in Telangana and upgradation of the existing manufacturing facility
  • The new facility in Telangana) will have a total estimated installed capacity of 51,943 tonnes per annum. The production at this new plant is likely to commence in FY21.
Indigo Paints at Rs 280/litre | Indigo Decorative Paint | ID: 15083153448

Indigo Paints IPO: Financials

PARTICULARS / Rs. In Cr2020(6)2019(6)fy20fy19fy18
Revenue from Operations259.42272.64624.79535.63401.48
Revenue Growth (%)-4.81%16.60%33.28%
EBITDA as stated48.0923.469154.0925.8
EBITDA (%) as [email protected]18.54%8.60%14.56%10.10%6.43%
Profit Before Tax35.2311.8167.4333.7112.55
Net Profit for the period27.215.9947.8226.8712.86
Net Profit (% )as stated10.45%2.19%7.63%5.00%3.19%
Equity Share Capital~29.0229.0229.0228.8528.59
Instruments in the nature of equity (CCCPS)18.318.318.318.318.3
Reserves as stated~177.05107.95149.73100.380.56
Net worth as stated224.37155.27197.05147.46127.46
Face Value10    
EPS –Basic (₹ )6.031.3310.615.98         2.88
RoNW (%)12.12%3.86%24.27%18.22%10.09%
NAV-Basic(₹ )~49.7534.4543.6932.8428.53
ROE (%)12.12%3.86%24.27%18.22%10.09%
ROCE (%)13.85%6.16%27.50%17.26%9.86%
Equity Post IPO47.57
IPO Price1490
EPS (Post IPO) FY2010.05
PE 148.22
EPS TTM sep’2115.10
PE 98.68
Market Cap7088
Market Cap  /  Sales11.3


Track record of consistent growth in a fast growing industry with significant entry barriers
•Differentiated products leading to greater brand recognition and enabling expansion into a complete range of decorative paint products
•Focused brand-building initiatives to gradually build brand equity
•Extensive distribution network for better brand penetration
•Leveraged brand equity and distribution network to populate tinting machines
•Strategically located manufacturing facilities with proximity to raw materials


  • The company’s business is working capital intensive
  • The company’s business is subject to seasonal variations and cyclicality
  • Raw materials are made from derivatives of crude oil and are sensitive to crude prices.

Indigo Paints IPO: Assessment

  • Paint Sector is experiencing strong tailwinds.
  • Indigo Paints is the fastest growing and among the top five paint companies in India. From a humble beginning when it set up a cement paint manufacturing unit in Jodhpur, Rajasthan, Indigo paints is today the fifth largest decorative paint manufacturer in India.
  • It has high-margin differentiated products account for 28% of revenue and these are backed with heavy ad spend.
  • Indigo Paints H1FY21 net margins at 10.5% were only next to Asian Paints and higher than other peers like Akzo, Berger Paints, Kansai Nerolac.
  • Indigo paints Ad spend is quite high and is almost at par with other big players in the industry.
  • Post the IPO. Sequoia will still be holding 29% stake in Indigo Paints.
  • E&Y has been the company’s auditor for the last 6 years.
  • After the IPO, Indigo Paints would be a debt free company.
  • Indigo’s average working capital cycle is 23 days which is the lowest in the sector.
  • For FY20, the company’s total revenue stood at Rs 624.8 crore compared to Rs 395.1crore in FY18 showing a CAGR of 25.8%.
  • Indigo Paints IPO is being offered at PE of 98. Other larger peers like Asian Paints, Kansai Nerolac and Berger Paints have higher or similar PE. for example Asian Paints trades at PE of 109. Akzo Nobel trades at a lower PE of 52.
  • I intend to apply in Indigo Paints IPO. The Indigo Paints IPO looks quite good both from the angle of listing gains as well as medium term/ long term portfolio.
  • Do check this page for any last minute updates

Standard disclaimer:  I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2)  Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors.  I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or  leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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