Indigo Paints will open its initial public offering for subscription on January 20. This would be the second IPO in calendar 2021 after Indian Railway Finance Corporation.
The public issue comprises a fresh issue of Rs 300 crore and an offer for sale of 58.40 lakh equity shares by promoters and investors. The offer for sale consists of 20.05 lakh equity shares by Sequoia Capital India Investments IV, 21.65 lakh equity shares by SCI Investments V and 16.7 lakh equity shares by promoter Hemant Jalan.
The company will utilise funds from its fresh issue for the expansion of the manufacturing facility at Pudukkottai in Tamil Nadu by setting up another facility (Rs 150 crore) nearby, purchase of tinting machines and gyroshakers (Rs 50 crore), repayment of borrowings (Rs 25 crore), and general corporate purposes.
Indigo Paints is the fastest-growing among the top five paint companies in India and is the fifth-largest company in the Indian decorative paint industry in terms of revenue from operations for FY2020. Former Indian team cricket captain Mahendra Singh Dhoni is its brand ambassador.
The company also plans to expand capacity at Pudukkottai by adding capacities to manufacture water-based paints to cater to the growing demand for these paints. The proposed installed production capacity of the expansion unit is 50,000 KLPA and it is expected to be operational during fiscal 2023.
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