Skip to main content

Indigo Paints trades at over 55% premium in grey market after IPO price announcement

The grey market premium has increased significantly from Rs 400-500 on January 11 to Rs 840-850 on January 15.

Indigo Paints, one of the fastest-growing paint companies in India, was trading at more than 50 percent premium over its higher issue price band of Rs 1,490 per share in the grey market after the announcement of IPO details.

The premium in the grey market as of January 15 was at around Rs 840-850 per share, which means the grey market trading price stood at Rs 2,340-2,330 against the issue price of Rs 1,490, as per the data available on IPO Watch. The premium increased significantly from Rs 400-500 on January 11 to Rs 840-850 today.

The grey market is an unofficial trading platform where shares get traded well before the allotment in an initial public offering and till the shares get listed on bourses. It generally estimates the expected listing price of a stock.

"Currently Asian paints and Berger paints are trading at a PE of 111 and 148, respectively, while Indigo Paints reported an EPS of Rs 10.49 valuing IPO at 149 at higher price band. We expect the GMP premium of Indigo Paints to consolidate in a couple of days. We have a positive outlook towards the IPO," Yash Gupta, Equity Research Associate at Angel Broking told Moneycontrol.

Indigo Paints will open its maiden public offer for subscription on January 20 with a price band of Rs 1,488-1,490 per share. The public issue consists a fresh issue of Rs 300 crore and an offer for sale of 58,40,000 equity shares by investors Sequoia Capital India Investments IV and SCI Investments V, and the promoters Hemant Jalan.



The offer includes a reservation of up to 70,000 equity shares for subscription by eligible employees of the company. Eligible employees will get these shares at a discount of Rs 148 per share to the offer price.

The company will utilise the fresh issue proceeds for expansion of its manufacturing facility at Pudukkottai, Tamil Nadu by setting-up another unit adjacent to the existing facility (Rs 150 crore), purchase tinting machines and gyroshakers (Rs 50 crore; repayment of borrowings (Rs 25 crore) and general corporate purposes.

Headquartered in Pune, Indigo Paints offers a complete range of decorative paints including emulsions, enamels, wood coatings, distempers, primers, putties and cement paints. The company owns and operates three manufacturing facilities in Jodhpur (Rajasthan), Kochi (Kerala), Pudukkottai.

These facilities had an aggregate installed production capacity of 1,01,903 kilo litres per annum (KLPA) for liquid paints and 93,118 metric tonnes per annum (MTPA) for putties and powder paints as of September 2020. The company has an extensive distribution network across 27 states and 7 union territories.

In FY2020, "Indigo Paints reported sales growth of 16.6 percent and peers reported sales growth of 3-5 percent, some of the peers have also reported negative sales growth. Indigo paints reported ROE of 24.3 percent in FY20, which is slightly lower than the Asian Paints and Berger Paints but better than Kansai Nerolac and Akzonobel," Yash Gupta said.

Indigo Paints doubled its PAT margin from 3.2 percent in FY2018 to 7.7 percent in FY20, while peers like Asian Paints and Berger Paints were able to increase margins by 2.5 percent and 3.4 percent, respectively, he added.

Comments

Post a Comment

Popular posts from this blog

Tata Realty looks to list 20 million sq ft of commercial assets as REIT

  The existing land bank has potential of 20 million sq. ft commercial development in the next three to four years, says CEO Sanjay Dutt Tata Realty and Infrastructure (TRIL) is planning to list its Real Estate Investment Trust (REIT) with a portfolio of 20 million sq ft of commercial assets in the next few years. This will be done after the portfolio is expanded from present 6.2 million sq ft to 20 million sq ft via new developments and acquisitions. Sanjay Dutt, managing director and chief executive officer of TRIL told The Economic Times that the existing land bank has potential of 20 million sq ft commercial development in the next three to four years. The portfolio may also include office spaces and data centre assets. He added that his team has looked at least four proposals from developers looking to monetise their portfolios including single assets and carved-out portfolios across the country. “We are targeting a 45-50 million sq ft in commercial portf...
Post a Comment
Read more

Max India shares fall 5% on relisting day

  Max India resumed trading on BSE and NSE on August 28. The company, earlier known as Advaita Allied Health Services Limited, is a part of the $3-billion Max Group. Even as the broader market sentiment was bullish, shares of Max India fell 5 percent on BSE on the day of its relisting. The stock debuted at Rs 80 on BSE but fell 5 percent soon to touch its lower price band at Rs 76 on August 28. Max India resumed trading on BSE and NSE on August 28. The company, earlier known as Advaita Allied Health Services Limited, is a part of the $3-billion Max Group. The new Max India is the holding company of Max Group’s senior-care business Antar and the skilling company Max Skill First. The relisting of Max India follows Max Healthcare’s listing last week. In a media release, the company said listings are the outcome of a comprehensive scheme announced last year that involved a series of transactions, including the demerger of KKR-backed Radiant Lifecare’s assets into Max ...
Post a Comment
Read more

Brokerages place bets on Titan, see double-digit upside in the stock

Titan can get benefits from the strong market share in the jewellery and wrist watches segment, mainly driven by a wide range of product portfolio catering mainly to the premium and value-added designer jewellery segment. After three consecutive sessions of losses, shares of Titan Company rose over a percent in morning trade on BSE on September 23. The company was dealt a severe blow by COVID-19 as the pandemic triggered strict lockdowns completely battered the retail sector. In the calendar year so far, shares of this one of the largest, most efficient and profitable specialty retailer in India are 7 percent down. The company reported a net standalone loss of Rs 270 crore for the quarter ended June 2020 as the COVID-19 pandemic hit business. The loss was higher than a CNBC-TV18 poll estimate of Rs 175 crore. Standalone revenue during the quarter declined 62.3 percent year-on-year to Rs 1,862 crore compared to the corresponding period last fiscal. Light at the end ...
Post a Comment
Read more