Indigo Paints Fixes IPO Price Band At Rs 1,488-1,490 Per Share

Indigo Paints Ltd. will sell shares at Rs 1,488-1,490 apiece in the three-day initial public offering that opens on Jan. 20

The IPO comprises sale of shares worth Rs 870.16 crore by Sequoia Capital India Investments IV, SCI Investments V and promoter Hemant Jalan; and a fresh issue worth Rs 300 crore.

Kotak Mahindra Capital Co. Ltd., Edelweiss Financial Services Ltd. and ICICI Securities Ltd. are the book running lead managers to the issue.

The paints company will use Rs 150 crore from the proceeds of the fresh issue to expand its existing manufacturing facility at Pudukkottai, Tamil Nadu; Rs 50 crore to purchase equipment and Rs 25 crore to repay debt and general corporate purposes.

The company has a 2% market share in the Rs 40,300-crore decorative paints segment, with a strong presence in southern India. It competes with Asian Paints Ltd., Berger Paints India Ltd., Kansai Nerolac Paints Ltd. and Akzo Nobel India Ltd.

Its revenue from operations from April to September stood at Rs 259.42 crore, down 4.8% over a year earlier. Net profit jumped more than fourfold to Rs 27.2 crore.

As of Sep. 30, the company had 10,988 dealers. “In the next five, six years, we would like to approach the dealer strength of the No. 2 and 3 players,” Hemant Jalan, chairman and managing director at Indigo Paints, told BloombergQuint in an interview.

The second-largest Berger Paints with a 12% market share has 30,000 active dealers, while Kansai Nerolac has a 7% market share and 27,000 active dealers, he said.

Watch the full interview here: