IPO note – Indigo Paints Limited

Indigo Paints Limited IPO

Indigo Paints Limited is one of the fastest-growing and amongst the top five paint companies in India. It is a reputed name in the decorative paints industry and has been in existence for almost two decades. Spread across 27 states and eight union territories in India as on September 30, 2020, the company has a wide-spread distribution network and offers products under the consumer brand “Indigo”. Renowned Indian cricketer, Mr Mahendra Singh Dhoni, is the brand ambassador.

The company manufactures an extensive range of decorative paints categories, including emulsions, enamels, wood coatings, distempers, primers, putties, cement paints, etc. As of September 30, 2020, the company operated three manufacturing facilities located in Jodhpur (Rajasthan), Kochi (Kerala) and Pudukottai (Tamil Nadu) with an aggregated installed capacity of 101,903-kilolitres per annum for liquid paints and 93,118 metric tonnes of putties and powder paints. Average plant utilization for liquid paints facility was 21% in Sep ’20 (30% in Sep ’19) and for putties and powder plant was 58% in Sep ’20 (111% in Sep ’19).

Key strengths:

  1. One of the leading decorative paints manufacturing company in India that has long been into existence
  2. Operates in a fast-growing industry that has significant entry barriers
  3. Has an extensive distribution network and brand penetration
  4. Strategically located manufacturing facilities
  5. Experienced management team

Amount in Rs CrIndigo - Condensed Financial Information

  • Strong revenue growth across product segments
  • Expanding margins and strong return on net worth

Peer comparison

Company Name 2020 Revenue Close price (Jan 18th)
Rs Crs Rs per share
Asian Paints 20,516 2,589
Berger Paints 6,434 777
Kansai Nerolac 5,306 642
AkzoNobel 2,699 2,278

Source – Company financials and Stock exchange website

Offer and Deployment of Net Proceeds

Particulars Amount (In Rs Cr)
Fresh Issue Rs 300 Cr
Offer for Sale of 58.4 Lakh shares Rs 870 Cr (at high band)

Deployment of funds

  • Funding capital expenditure for expansion of existing manufacturing facility at Pudukkottai, Tamil Nadu by setting up an additional unit
  • Purchase of tinting machines and gyro shakers
  • Repayment/prepayment existing borrowings
  • General corporate expenses

Quick IPO Facts

Indigo Paints Limited IPO Fact sheet

Conclusion thoughts:

  • Fast-growing decorative paints company with a pan-India presence
  • Indigo Paints competes with listed peers like Asian Paints, Berger Paints, Kansai Nerolac Paints, AkzoNobel, etc. These companies enjoy high PE multiple valuations
  • The company operates in a high growth paints industry in India
    • India’s per capita consumption of paints and coatings is still amongst the lowest
    • Per capita consumption of paint products will increase in future
  • Organized players dominate the paint industry with two-third market share, and their share is expected to remain strong in future


The information provided in red herring prospectus filed by Indigo with the Securities and Exchange Board of India (www.sebi.gov.in) is the basis for this note. However, I recommend the reader to validate the data before making any financial decision. Also, investment in an initial public offering (IPO) is subject to market risks and should be evaluated, keeping your risk profile and investment objective in mind. The author will not be responsible for any financial loss or otherwise resulting from any action taken based on the above.

The author is a senior finance professional with over fifteen years of work experience in corporate finance and has an affinity for personal finance and investment management. Please leave your comment or share thoughts on this article via email at decodefinance.in@gmail.com. For more articles, please visit the website www.decodefinance.in


The author has used his knowledge, experience, and understanding of the subject to write this article. Any views, opinions, and thoughts mentioned in the article belong solely to the author, and not necessarily to the author’s employer (past or current), organization, committee, or other group or individual.

Under no circumstances the author shall be liable for any views or analysis expressed in this note. Further, the opinions expressed are not binding on any authority or Court. We advise readers to consult their financial advisor for assistance in their specific case.

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