Indigo Paints is all set to launch its IPO after it recently received a nod from the Securities and Exchange Board of India (SEBI).
The company had filed preliminary papers for the IPO with the market regulator in November last year. The Indigo Paints IPO will open for subscription on January 20 and close two days later on January 22.
The company plans to raise approximately Rs 1,000 crore through the IPO from the capital markets.
One day before the IPO opening, Indigo Paints shares were trading with a 54.36 per cent premium over the IPO price in the grey market today. The shares of the fifth-largest company in the decorative paint industry were trading at Rs 2,300, up to Rs 810 from the issue price.
The IPO comprises fresh issuance of stocks aggregating to Rs 300 crore and an offer-for-sale of up to 58,40,000 equity shares by private equity firm Sequoia Capital through its two funds, SCI Investments IV and SCI Investments V and promoter Hemant Jalan.
The price band for the issue has been fixed at Rs 1,488-1,490 a share.
Antique Stock Broking said Indigo Paints might continue to gain market share and outperform its larger peers in the short to medium term. This, it said, will be through scaling up of operations in the newly-entered markets and increasing presence in larger cities within its existing mainstay geographies.
“We believe Indigo Paints’ demand for valuation in line with industry average is justified, as its Ebitda margin, and ROE of 24-27 per cent for FY20 is in line with the sectoral peers in an industry that has significant entry barriers.” the company said.