Indigo Paints IPO: Opens tomorrow; Key details an investor should know before subscribing

Indigo Paints Initial Public Offering (IPO) is ready to open for subscription tomorrow, i.e. January 20, 2021. The public issue of Indigo Paints will close on January 22, 2021.

Indigo Paints has fixed the price band of the share sale at Rs 1,488-1,490 a share. Investors can bid for a minimum one lot of 10 shares and in multiples, extending up to 13 lots. The public issue will garner Rs 1,168.99 crore to Rs 1,170.16 crore at the higher end of the price band.

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

The bidding for anchor book is expected to take place for a day on January 19.

The public issue of Indigo Paints is going to be the second public issue to open for subscription in 2021, after the ongoing Indian Railway Finance Corporation IPO. The shares are likely to be listed on the BSE Sensex and NSE Nifty on February 2, 2021.

The IPO comprises fresh issuance of stocks aggregating to Rs 300 crore and an offer-for-sale of up to 58,40,000 equity shares by private equity firm Sequoia Capital through its two funds -- SCI Investments IV and SCI Investments V -- and promoter Hemant Jalan. Investors - Sequoia Capital India Investments IV and SCI Investments V - are going to sell 20.05 lakh equity shares and 21.65 lakh shares, respectively. The promoter Hemant Jalan will offload 16.70 lakh equity shares in the public issue.

Headquartered in Pune, Indigo Paints will use the proceeds of the IPO to expand its existing manufacturing plant at Pudukkottai in Tamil Nadu, to purchase tinting machines and gyro shakers, to repay the borrowings and general corporate purposes.

The company will not receive any proceeds from the offer for sale, which will go to selling shareholders.

Kotak Mahindra Capital Company, Edelweiss Financial Services and ICICI Securities are the books running lead managers to the offer.

Indigo Paints produces a range of decorative paints at its manufacturing facilities in Rajasthan, Kerala and Tamil Nadu. It is the fastest growing and falls among top five paint companies in India and 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.

Besides, Home First Finance Company India Limited's public issue which will open on January 21, 2021, will be the third public issue of 2021. It will close on January 25, 2021.