Pune-based Indigo Paints, the fifth-largest decorative paint company in India, will open its initial public offering for subscription on January 20 and close by January 22. This will be the second IPO in calendar 2021 after the Indian Railway Finance Corporation's public offering.
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.
The company has fixed a price band of Rs 1,488 to 1,490 per equity share with a face value of Rs 10 each. A discount of Rs 148 is being offered to eligible employees.
The two-day initial public offering (IPO) will conclude on January 22. The anchor investors' portion will be open for subscription on January 19, Indigo Paints said in a virtual press conference.
At the upper end of the price band, the public issue is expected to fetch Rs 1,170.16 crore, which comprises Rs 300 crore through fresh issuance of shares and Rs 870.16 crore through offer-for-sale.
Half of the issue is reserved for qualified institutional buyers, 35 percent for retail investors, 15 percent for non-institutional bidders, and there is a reservation of up to 70,000 equity shares for subscription for employees, who will get a discount of Rs 148 per equity share to the offer price.
Indigo Paints proposes to utilise the net proceeds for funding capital expenditure at its manufacturing facility in Pudukkottai, Tamil Nadu, besides repayment and prepayment of the company's borrowings and general corporate purposes.
Kotak Mahindra Capital Company, Edelweiss Financial Services and ICICI Securities are the book running lead managers to the issue.
Indigo Paints, set up in 2000, 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 and primers.
The Pune-based company manufactures a range of decorative paints and has an extensive distribution network across the country. As of September 30, 2020, the company has three manufacturing facilities located in Rajasthan, Kerala and Tamil Nadu.
(Inputs from Agencies)