Shares of Indigo Paints made a stable debut on the bourses on Tuesday, itemizing at Rs 2,607.50, a 75 per cent premium in opposition to concern value of Rs 1,490 on the Nationwide Inventory Alternate (NSE) and BSE. The inventory surged to Rs 3,129, up 110 per cent in opposition to concern value on the BSE and NSE, change information exhibits.
At shut, Indigo Paints was at Rs 3,118.6, up 109 per cent in opposition to concern value on the BSE.
The enticing pricing, relative to its friends, together with its larger progress potential had attracted traders in the direction of the difficulty. The preliminary public providing (IPO) of Indigo Paints had garnered 117 occasions subscription, producing bids value Rs 96,222 crore. The certified institutional purchaser (QIB) portion of the difficulty was subscribed 190 occasions, whereas the excessive networth particular person or HNI phase was subscribed 263 occasions. The retail and worker parts have been subscribed 16 occasions and a pair of.5 occasions, respectively.
Pune-based Indigo Paints is the nation’s fifth-largest ornamental paints firm. The corporate generates practically half its gross sales from southern India, and is ranked third when it comes to market share in Kerala. The agency plans to make use of bulk of the difficulty proceeds to fulfill its growth targets.
Indigo Paints’ product innovation (largely differentiated merchandise), improve in sellers attain (particularly within the giant cities) and help for merchandise with ample model investments would be the key progress levers within the coming years. Although Indigo’s valuations are at premium to friends, sturdy monetary observe file, promoters expertise and confidence to guide the enterprise coupled with business par return profile makes it an rising play within the home ornamental paint business, brokerage agency Sharekhan stated in IPO notice.
Based on Angel Broking, Indigo Paints has a observe file of constant progress in a quick rising business with entry obstacles. The corporate has differentiated merchandise resulting in larger model recognition and enabling growth into an entire vary of ornamental paint. It additionally has leveraged model fairness and distribution community to populate tinting machines. Strategically positioned manufacturing amenities with proximity to uncooked supplies helps to report higher gross margins, the brokerage agency stated in a notice.
Indigo Paints constructed upon its place within the excessive entry barrier business by growing differentiated merchandise portfolio (29 per cent of gross sales). Given the early mover benefit on this house, these merchandise yield comparatively larger margin for Indigo which is now at par with friends. It additionally made it simpler for the corporate to construct upon its model, increase its distribution community pan India (11000 sellers) and set up ~4,600 tinting machines at sellers which helped push up gross sales, analyst at Motialal Oswal Securities stated in IPO notice.
We like Indigo Paints given its differentiated product portfolio and strong growth plans. We consider it might probably attain scale and preserve its sturdy progress over subsequent few years, the brokerage agency stated.
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