IPO : Indigo Paints Limited

Indigo Paints Limited, the fastest growing amongst the top five paint companies in India, sells its products under the brand ‘Indigo’, through its distribution network across 27 states and seven union territories as of September 2020. It is also the fifth largest company in the Indian decorative paint industry in terms of revenue from operations for FY2020, as per F&S Report. The company manufactures a complete range of decorative paints including emulsions, enamels, wood coatings, distempers, primers, putties and cement paints.

As of September 2020, Indigo Paints owns and operates three strategically established manufacturing facilities located in Jodhpur (Rajasthan), Kochi (Kerala) and Pudukkottai (Tamil Nadu) with proximity to raw materials. Indigo Paints remained least affected during COVID-19 pandemic (growth in sales and EBITDA margin terms) as compared to peers due to extensive presence in small towns which might be one of the reason that led the company to outperform its peers during covid times and now expanding faster into large cities.

The company proposed to utilise the net proceeds from its fresh issue for expansion of the existing manufacturing facility at Pudukkottai, Tamil Nadu by setting up an additional unit adjacent to the existing facility, purchase of tinting machines and gyro-shakers, repayment certain of borrowings and general corporate purposes. The company has track record of consistent growth in a fast growing industry with significant entry barriers. Given strong fundamentals, good return ratios, and attractive growth prospects comforts investors with listing gains or long-term perspective.

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