Shares of Indigo Paints fell 6% in early trade on November 9 after 21 lakh shares, or 4.4% of the share capital, changed hands at Rs 1,384 per unit, CNBC-TV18 reported.

The deal is worth Rs 283 crore. At 9:30 am, Indigo Paints was quoted at Rs 1,412 on the National Stock Exchange, down 5.4%, to open at Rs 1,352.15. The stock’s 52-week low was Rs 1,331.

Venture capital firm Sequoia Capital will sell a 3.3% stake at a reserve price of Rs 1,315 per share, worth Rs 235 crore, sources told CNBC-TV18 on November 8. As of September 30, 2022, Sequoia Capital held a 13.73% stake in Indigo Paint by the equity model shared with BSE.

In Q2FY23, IndiGo Paints posted strong results with the company’s net profit rising 174% YoY to Rs 37.1 crore. Operating income for the quarter was Rs 242.6 crore, an increase of 23.7% compared to the same period last year.

The brokerage retained its rating on Indigo Paints after the second-quarter show. Nuvama Research has a “buy” rating on the stock with a price target of Rs 2,200 per share. “We remain optimistic about Indigo’s ability to increase its presence across markets. We expect a good margin recovery in the third quarter and even better growth in the fourth quarter,” its analysts noted.

Domestic brokerage Motilal Oswal Financial Services also has a “buy” rating on the stock with a target price of Rs 1,720. “Sales momentum is good, and incremental margins are likely to improve significantly amid slower peers, implying no significant downward revision to our FY24 EPS forecast,” it noted.