Issue Highlights
After its inception in 2000, Indigo Paints – the fifth largest company in the paint industry is all set to smash the dalal street. Being the fastest growing company in the sector, the company has a huge potential to give remarkable equity gains.
The issue includes a reservation of up to 70,000 equity shares for subscription by eligible employees.
Strengths
- Consistent & fastest revenue growth
- Differentiated products leading to greater brand recognition
- Extensive distribution network
- Expertly located manufacturing facilities
- Strong brand equity
- Well-qualified and experienced management team
Valuation
The company reported its EPS at 10.49,bringing the IPO valuation to a P/E of 142 at upper price band, against sector PE of 89.02. Though it is costlier, we are positive towards the issue based on its strengths.
Utilization of Funds
Background highlights of the company in brief
- Indigo Paints had commenced its journey in the year 2000, manufacturing lower-end Cement paints.
- The company gradually expanded its range to cover most segments of water-based paints like Exterior Emulsions, Interior Emulsions, Distempers, Primers, etc.
- As an additional services to its clients, the company also offers ready-made colour combinations for living room, bed room, kitchen, children’s room, bathroom, offices, among others. It also gives an option to try different colour combinations on its website to give visual of the after-effect.
- Indigo Paints has made its place in the top five players in the paint industry in the country.
- It is the fastest growing paint companies in India, and is the fifth largest in company in the Indian decorative paint industry in terms of our revenue from operations for Fiscal 2020.
- Indigo Paints is the first company that started manufacturing some of the differentiated products like Metallic Emulsions, Bright Ceiling Coat Emulsions, Tile Coat Emulsions, Dirt proof & Waterproof Exterior Laminate, Floor Coat Emulsions, Exterior and Interior Acrylic Laminate, and PU Super Gloss Enamel.
- The company has created an extensive distribution network across 27 states and seven union territories as of 30 Sep 2020, and has installed tinting machines across its network of dealers.
- As of 30 Sep 2020, the company owns and operates three manufacturing facilities located in Jodhpur (Rajasthan), Kochi (Kerala) and Pudukkottai (Tamil Nadu) with an aggregate estimated installed production capacity of 101,903 KLPA for liquid paints and 93,118 MTPA for putties and powder paints.
- The company also intends to expand its manufacturing capacities at its facility at Pudukkottai, by adding capacities to manufacture water-based paints to cater to the growing demand for these paints.
- The proposed installed production capacity of the expansion unit is 50,000 KLPA and it is expected to be operational during Fiscal 2023.
Briefing about directors & key managerial personnel
Briefing Financials
Balance Sheet
Statement of Profit and Loss
Key Ratios
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