Indigo Paints IPO
Started in the year 2000, Indigo Paints had a modest beginning. It started out with the manufacture of lower-end Cement paints, and gradually expanded its range to cover most segments of water-based paints like Exterior Emulsions, Interior Emulsions, Distempers, Primers, etc.
Todays, Indigo Paints is India’s top paint company and fastest growing amongst the top five paint companies in India. Indigo Paints is the fifth largest company in the Indian decorative paint industry in terms of our revenue from operations for Fiscal 2020.
Products of the company
Indigo Paints manufacture a complete range of decorative paints including emulsions, enamels, wood coatings, distempers, primers, putties and cement paints. Apart from this , they also identify potential product needs from customers and introduce differentiated products to meet these requirements, and create a distinct market for products. For instance, they were the first company to manufacture and introduce certain differentiated products in the decorative paint market in India, which includes Metallic Emulsions, Tile Coat Emulsions, Bright Ceiling Coat Emulsions, Floor Coat Emulsions, Dirtproof & Waterproof Exterior Laminate, Exterior and Interior Acrylic Laminate, and PU Super Gloss Enamel (together, “Indigo Differentiated Products”).
As on 31.03.2020, the sales of “differentiated products” contributes 28% in the revenue of Indigo Paints.
How they launch products in the market
They first create demand for its products into Tier 3, Tier 4 Cities, and Rural Areas, where brand penetration is easier and dealers have greater ability to influence customer purchase decisions . Later on once product becomes a hit in rural areas, they subsequently leveraged this network to engage with dealers in Tier 1 and Tier 2 Cities and Metros as well.
They operate three manufacturing facilities located in Jodhpur (Rajasthan), Kochi (Kerala) and Pudukkottai (Tamil Nadu) with an aggregate estimated installed production capacity of 101,903 kilo litres per annum (“KLPA”) for liquid paints and 93,118 metric tonnes per annum (“MTPA”) for putties and powder paints.
As of March 2020, Indigo Paints have distribution network comprised 36 depots, and 11,230 Active Dealers and the total number of tinting machines given to distributors are 4,296.
Tinting Machines- It is a machine to mix colors and produce different combination of colors. In color theory, a tint is a mixture of a color with white, which increases lightness, while a shade is a mixture with black, which increases darkness. When we mix colorants, such as the pigments in paint mixtures, a color is produced which is always darker and lower in chroma, or saturation, than the parent colors.
The decorative paint industry has grown at a CAGR of 11.5% from Fiscal 2014 to Fiscal 2019, driven by consumption of paints in Tier 2 – Tier 4 Cities. And for the paint industry, Tier 2 – Tier 4 Cities and Rural Areas account for nearly half the total sales. And Indigo Paints focus mainly focus on Tier-2 and Tier-4 cities.
Objects of the Indigo Paints IPO:
Indigo Paints IPO Details:
|Open Date:||Jan 20 2021|
|Close Date:||Jan 22 2021|
|Face Value:||₹ 10 Per Equity Share|
|Issue Type:||Book Building|
|Issue Size:||1176 Cr.|
|Lot Size:||10 Shares|
|Issue Price:||₹ 1488-1490 Per Equity Share|
|Listing Date:||Feb 01 2021|
Promoters And Management:
Financials of Indigo Paints IPO:
|Purchase of Goods Trade||5||10||8||5|
|Change in Inventory||6||-10||-6||4|
|Profit Before Tax||38||68||35||21|