Indigo Paints

By:- Hitesh Singla

 Introduction
Indigo Paints is one of the fastest-growing
paint companies in India and in terms of
revenue, it is the 5th largest company in the
decorative paint industry. The company is
engaged in manufacturing different types of
decorative paints like enamels, emulsions,
wood coatings, primers, distempers, putties,
and cement paints.
 Company Strengths
Scope
Large product portfolio with differentiated products.
Well-proven, and consistent growth track record.
Strong brand equity.
Extensive network distribution.
Strategically located manufacturing facilities.
 Indigo Paints Limited Stock
Quote & Charts
2588.1
-2.05 (-0.08%)
Open: 2582
High - Low: 2598.9 -
2570.1
Previous Close:
2590.15
Total Traded Value:
 Risks
The continuing impact of the Covid-19 pandemic.
Inability to identify or effectively respond to evolving
preferences.
Inability to enter into new relationships with dealers and
painters.
Not being able to enter into long-term arrangements
with dealers.
Under-utilisation of its manufacturing capacities.
 Indigo Paints IPO Tentative Timetable
Objectives
The Indigo Paints IPO open date is Jan 20, 2021, and the close date is Jan 22, 2021.
The issue may list on Feb 2, 2021.
Indigo
Research
Paints Methodology
IPO
Details
Financial Information
Major Findings and
Recommendations
 Object of
Issue
The net proceed from the Indigo Paints IPO will be used
against following objectives.
To meet the capital expenditure requirements for
manufacturing facility expansion at Pudukkottai, Tamil
Nadu
To purchase tinting machines and gyroshakers.
To repay all or certain borrowings.
To meet general corporate purposes.
Indigo Paints Peer
Comparison
 SWOT
Strenths
ANALYSI
Rising Net Cash Flow and Cash from Operating activity
Company with No Debt

S
Strong cash generating ability from core business - Improving Cash
Flow from operation for last 2 years
Annual Net Profits improving for last 2 years
Book Value per share Improving for last 2 years
 Weakness
Companies with growing costs YoY for long term projects
MFs decreased their shareholding last quarter
Decline in Net Profit with falling Profit Margin (QoQ)

Opportunity
Rising Delivery Percentage Compared to Prev Day
 Threats
Stocks with Expensive Valuations according to the Trendlyne Valuation Score

177.2% returns for Nifty 500 over 4.5 years

Degrowth in Revenue, Profits and Operating Profit Margin in recent results (QoQ)

Increasing Trend in Non-Core Income

Stocks with high PE (PE > 40)
 Conclusion
Indigo paints is a company with Zero Promoter Pledge
FII / FPI or Institutions increasing their shareholding
Every Day percentage of delivery is increasing
The company is well proven and consistent growth track
record.
Bottom up approach