Share of Indigo Paints listed at a 75% premium to its issue price on Monday.
The stock made its market debut at Rs 2,607.50 against its issue price of Rs 1,490 on BSE and NSE given the strong IPO subscription and 2021 Budget-driven bullish broader market.
The stock hit day's high at Rs 2756.30 on BSE and at Rs 2,747 on NSE.
The share later fell on profit-booking and touched day's low at Rs 2,428.20 and Rs 2,436.05 on BSE and NSE, respectively.
Indigo Paints IPO, with a price band of Rs 1,488-1,490 a share, was aggressively priced as compared to its listed peers. Analysts had recommended only investors with a high-risk appetite to subscribe for the Indigo Paints IPO. The issue was subscribed 117 times during the three-day share sale, that ended on January 22.
Market capitalisation of Indigo Paints stood at Rs 11,933.63 crore today.
Nirali Shah gave subscribe call to Indigo Paints for listing gains and said,"Indigo Paints has made its brand name despite strong entry barriers due to experienced players such as Asian Paints. Financials have been extremely strong for this paints player with minimal debt on its books. There are a few challenges in terms of setting up a wide distribution presence amidst well-established players, its skewed market presence in South India, especially Kerala and rich valuations at a PE of 140x compared to a sector average of 95x."
Being one of the fastest-growing paint companies in India and in terms of revenue, Indigo Paints has a strong market network with dealers in Tier 1, Tier 2, and metros.
The company plans to use proceeds worth Rs 1,170.16 crore from public issue to meet the upcoming capital expenditure requirement for manufacturing facility expansion at Pudukkottai, Tamil Nadu, to purchase tinting machines and gyroshakers and repay all or certain borrowings.
The initial public offering (IPO) of Indigo Paints, comprised a fresh issue of Rs 300 crore and an offer for sale of Rs 870 crore by promoters and investors.
The firm backed by American venture capital firm Sequoia Capital, garnered Rs 347.9 crore from 25 anchor investors ahead of the share sale.
It is the first company that started manufacturing certain differentiated products like Metallic Emulsions, Bright Ceiling Coat Emulsions, Tile Coat Emulsions, Dirtproof & Waterproof Exterior Laminate, Floor Coat Emulsions, Exterior and Interior Acrylic Laminate, and PU Super Gloss Enamel.
The company has a large product portfolio with differentiated products, extensive network distribution and strategically located manufacturing facilities. As per experts, the firm has managed to rapidly grow its market share and the growth outlook of the company seems to be attractive.