India's Indigo Paints soars 84% in stellar market debut (updated)

Indigo Paints

02/02/2021 06:22

(Adds background on company, industry and IPO)
    BENGALURU, Feb 2 (Reuters) - Shares in Indigo Paints Ltd
 INDG.NS  jumped 84% in their market debut on Tuesday after a
bumper response to the Indian paint maker's $160 million initial
public offering (IPO) last month, underscoring investor
confidence in the sector as the economy recovers.
    Indigo Paints opened at 2,607.5 rupees ($35.71), a 75%
premium to its issue price of 1,490 rupees, and rose to as much
as 2,747 rupees, boosted by market euphoria following the
federal budget on Monday, which included a proposal to extend a
tax holiday for low-cost housing projects.  urn:newsml:reuters.com:*:nD8N2GR01S
    The Indian paint industry is valued at about 545 billion
rupees and is expected to grow to 971 billion rupees by 2024,
according to the company's prospectus. 
    Conglomerate Grasim Industries Ltd  GRAS.NS  announced its
foray into the paint industry last month, with a 50 billion
rupee investment, citing robust outlook for the organized
sector.  urn:newsml:reuters.com:*:nL4N2K01BM
    India has seen robust responses to consumer-focused IPOs and
market debuts in recent months, as the stock market galloped to
record highs on strong foreign inflows, boosted by coronavirus
vaccine hopes and abundant liquidity in global markets.
 urn:newsml:reuters.com:*:nL4N2J40WU  urn:newsml:reuters.com:*:nL4N2IU125
    Investors bid for 117 times the shares on offer in the
Indigo Paints' initial public offering, where it issued new
shares worth 3 billion rupees and existing investors, including
Sequoia Capital India Investments, sold stake worth 8.7 billion
rupees. https://bityl.co/5RaP
    Pune-based Indigo Paints clocked a 78% jump in profit for
the year ended March 31, 2020, on revenue growth of 16.6%,
according to its prospectus.
    The company will use proceeds from the IPO, which ran from
Jan. 20-22, to fund the expansion of a manufacturing facility in
the southern state of Tamil Nadu, purchase equipment and repay
debt.  

($1 = 73.0170 Indian rupees)

 (Reporting by Chris Thomas in Bengaluru; Editing by Rashmi
Aich)
 ((chris.thomas@thomsonreuters.com; +91-80-6749-8695;))