Sequoia Capital backed Indigo Paints files for IPO
Pune based, Indigo Paints who stands to be the fifth-largest company in the Indian decorative paint industry in terms of their revenue from operations in FY20 has filed its DRHP to raise approximately 1000 cr, as per market sources. The IPO is a fresh issuance aggregating to Rs300cr and an Offer for sale of up to 58,40,000 equity shares of the face value of Rs10 each by Investor Selling Shareholder Sequoia Capital through its two funds SCI Investments IV and SCI Investments V and Promoter Selling Shareholder, Hemant Jalan.
Besides identifying potential product needs and introducing differentiated products, the company manufactures a range of decorative paints including emulsions, enamels, wood coatings, distempers, primers, putties and cement paints under the primary consumer brand- Indigo and has an extensive distribution network across 27 states and 7 union territories particularly in Kerala, West Bengal, Bihar, Jharkhand, Chhattisgarh, Odisha and Uttar Pradesh. As of September 30, 2020, the company has three strategically located manufacturing facilities in India, located in the states of Rajasthan, Kerala and Tamil Nadu.
The net proceeds from the issue is to fund the capital expenditure for the expansion of the existing manufacturing facility at Pudukkottai; purchase of tinting machines and gyro shakers and repayment/prepayment of borrowings
The Indian decorative paints market is expected to record a growth rate of approximately 13% in value and 10.2% in volume through 2024, driven by an increase in the disposable income of individuals and families and various housing schemes. Emulsions is the largest and fastest growing product segment and in FY19 the market was estimated at Rs 163. 9 bn.
Kotak Mahindra Capital Company, Edelweiss Financial Services, ICICI Securities are the BRLMS and Link Intime is the registrar to the Issue.