Indigo Paints soars 84% ​​for stellar market debut

BENGALURU (Reuters) – Shares of Indigo Paints Ltd jumped 84% on their market debut on Tuesday after an outstanding response to the Indian paintmaker’s $ 160 million initial public offering (IPO) in the month latest, underscoring investor confidence in the sector as the economy recovers.

Indigo Paints opened at 2,607.5 rupees ($ 35.71), a premium of 75% over its issue price of 1,490 rupees, and reached as high as 2,747 rupees, boosted by market euphoria at the sequel to Monday’s federal budget, which included a proposed tax extension. vacations for social housing projects.

India’s paint industry is valued at around 545 billion rupees and is expected to reach 971 billion rupees by 2024, according to the company’s prospectus.

Conglomerate Grasim Industries Ltd announced its foray into the paint industry last month, with an investment of Rs 50 billion, citing strong prospects for the organized sector.

India has seen robust responses to consumer-focused IPOs and market debuts in recent months, as the stock market galloped to record highs thanks to strong foreign inflows, boosted by vaccine hopes against the coronavirus and the abundance of liquidity in global markets.

Investors offered 117 times the offered shares as part of Indigo Paints’ initial public offering, where it issued new shares worth Rs 3 billion and existing investors including Sequoia Capital India Investments, sold a stake worth Rs 8.7 billion. bityl.co/5RaP

Pune-based Indigo Paints reported a 78% profit increase for the fiscal year ended March 31, 2020, on revenue growth of 16.6%, according to its prospectus.

The company will use the proceeds of the IPO, which ran from January 20 to 22, to finance the expansion of a manufacturing plant in the southern state of Tamil Nadu, purchase equipment and pay off debt .

($ 1 = 73.0170 Indian rupees)