Indigo Paints Limited, to open its Initial Public Offer on January 20, 2021
sets Price Band of Rs. 1,488-1,490 per Equity Share!
Price Band ofRs.1,488 – Rs.1,490 per equity share offace value of Rs. 10 each (“Equity Share”)A discount of Rs. 148 per Equity Share is being offered to Eligible Employees bidding in the Employee Reservation Portion
Bid/Offer Opening Date – Wednesday, January 20, 2021 and Bid/Offer Closing Date – Friday, January 22, 2021
Minimum Bid Lot is 10 Equity Shares and in multiples of 10 Equity Shares thereafter
The Floor Price is 148.8 times the Face Value of the Equity Shares and the Cap Price is 149.0 times the Face Value of the Equity Shares.
Chennai, January 14, 2021: Indigo Paints Limited (the “Company”), one of the fastest growing amongst the top five paint companies in India and fifth largest company in the Indian decorative paint industry in Indiain terms of its revenue from operations for FY20 (Source: F&S Report), will open the Bid/Offer period in relation to its initial public offeringof Equity Shares (the “Offer”/ “IPO”) on Wednesday, January 20, 2021.The Bid/Offer period will close on Friday, January 22, 2021.The price band of the Offer has been fixed at Rs. 1,488 – Rs. 1,490 per Equity Share. The Company may, in consultation with the Book Running Lead Managers (the “BRLMs”), consider participation by Anchor Investors which shall be one Working Day prior to the Bid/Offer Opening Date.
The IPO comprises a fresh issuance of Equity Shares aggregating to Rs. 3,000 million by the Company (“Fresh Issue”) and an offer for sale of up to 5,840,000 Equity Shares by Sequoia Capital India Investments IV and SCI Investments V (the “Investor Selling Shareholders”), and the promoter selling shareholder, Hemant Jalan (the “Promoter Selling Shareholder” and together with the Investor Selling Shareholders, the “Selling Shareholders” and such offering of Equity Shares by the Selling Shareholders, the “Offer for Sale”). The Offer includes a reservation of up to 70,000 Equity Shares for subscription by Eligible Employees of the Company (the “Employee Reservation Portion”). The Company and the Selling Shareholders in consultation with the BRLMs, are offering a discount of Rs. 148 per Equity Shareto the Offer Price to Eligible Employees bidding in the Employee Reservation Portion.
The Offer less the Employee Reservation Portion is referred to as the “Net Offer”. The Offer is being made through book building process in accordance with Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957 and Regulation 31 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (the “SEBI ICDR Regulations”) and in compliance with Regulation 6(1) of the SEBI ICDR Regulations, wherein not more than 50% of the Net Offer shall be allocated on a proportionate basis to Qualified Institutional Buyers (“QIBs”, the “QIB Portion”), provided that the Company may, in consultation with the BRLMs, allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations (“Anchor Investor Portion”), of which one-third shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. In the event of under-subscription, or non-allocation in the Anchor Investor Portion, the balance Equity Shares shall be added to the Net QIB Portion. Further, 5% of the Net QIB Portion shall be available for allocation on a proportionate basis only to Mutual Funds, and the remainder of the Net QIB Portion shall be available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being received at or above the Offer Price. However, if the aggregate demand from Mutual Funds is less than 5% of the Net QIB Portion, the balance Equity Shares available for allocation in the Mutual Fund Portion will be added to the remaining Net QIB Portion for proportionate allocation to QIBs.
Further, not less than 15% of the Net Offer shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Offer shall be available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. Further, Equity Shares will be allocated on a proportionate basis to Eligible Employees applying under the Employee Reservation Portion, subject to valid Bids received from them at or above the Offer Price. All potential Bidders (except Anchor Investors) are required to mandatorily utilise the Application Supported by Blocked Amount (“ASBA”) process providing details of their respective ASBA accounts, and UPI ID in case of RIBs using the UPI Mechanism, if applicable, in which the corresponding Bid Amounts will be blocked by the SCSBs or by the Sponsor Bank under the UPI Mechanism, as the case may be, to the extent of respective Bid Amounts. Anchor Investors are not permitted to participate in the Offer through the ASBA process.
The Company proposes to utilise the Net Proceeds as follows (i) INR 1,500 mn towards funding capital expenditure for expansion of its existing manufacturing facility at Pudukkottai, Tamil Nadu by setting-up an additional unit adjacent to the existing facility; (ii) INR 500 mn towards purchase of tinting machines and gyroshakers;(ii) INR 250 mn towards repayment/prepayment of all or certain of Company’s borrowings; and (iv) balance towards general corporate purposes.
The Equity Shares offered in this Offer are proposed to be listed at both BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”, together with BSE, the “Stock Exchanges”) post the listing. For the purpose of the Offer, BSE is the Designated Stock Exchange.
Kotak Mahindra Capital Company Limited, Edelweiss Financial Services Limited and ICICI Securities Limited are the BRLMs to the Offer.
All capitalized terms used herein and not specifically defined shall have the same meaning as ascribed to them in the Red Herring Prospectus dated January 11, 2021 (“RHP”).
Disclaimer: INDIGO PAINTS LIMITED is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to make an initial public offer of its Equity Shares and has filed the RHP with the RoC and thereafter with SEBI and the Stock Exchanges. The RHP is available on the website of Securities and Exchange Board of India at www.sebi.gov.in, on the websites of the Stock Exchanges at www.bseindia.com and www.nseindia.com as well as on the websites of the BRLMs, Kotak Mahindra Capital Company Limited at www.investmentbank.kotak.com, Edelweiss Financial Services Limited at www.edelweissfin.com and ICICI Securities Limited at www.icicisecurities.com, respectively. Investors should note that investment in equity shares involves a high degree of risk and for details relating to such risk, see “Risk Factors” beginning on page 23 of the RHP. Potential investors should not rely on the draft red herring prospectus dated November 11, 2020 for any investment decision. The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or any other applicable law of the United States and, unless so registered, may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered and sold (i) within the United States only to persons reasonably believed to be “qualified institutional buyers” (as defined in Rule 144A and referred to in the RHP as “U.S. QIBs” (for the avoidance of doubt, the term “U.S. QIBs” does not refer to a category of institutional investor defined under applicable Indian regulations and referred to in the RHP as “QIBs”)) in transactions exempt from, or not subject to, the registration requirements of the Securities Act, and (ii) outside the United States in offshore transactions in reliance on Regulation S and pursuant to the applicable laws of the jurisdictions where those offers and sales are made.
The Company was originally incorporated as ‘Indigo Paints Private Limited’ at Pune, Maharashtra as a private limited company under the Companies Act, 1956, pursuant to the certificate of incorporation dated March 28, 2000 issued by the Registrar of Companies, Maharashtra at Pune. Subsequently, the Company was converted into a public limited company and consequently the name of the Company was changed to ‘Indigo Paints Limited’ and a fresh certificate of incorporation dated August 20, 2020 was issued by the Registrar of Companies, Maharashtra at Pune. For details in relation to changes in the name and the registered office of the Company, see “History and Certain Corporate Matters” beginning on page 178 of the RHP. Registered and Corporate Office: Indigo Tower, Street-5, Pallod Farm-2, Baner Road, Pune 411 045, Maharashtra, India; Tel: +91 20 6681 4300; Website: www.indigopaints.com; Contact Person: Sujoy Bose, Company Secretary and Compliance Officer; E-mail: [email protected]; Corporate Identity Number: U24114PN2000PLC014669.
DISCLAIMER CLAUSE OF SECURITIES AND EXCHANGE BOARD OF INDIA (“SEBI”): SEBI only gives its observations on the offer documents and this does not constitute approval of either the Issue or the specified securities stated in the offer document. Potential investors are advised to refer to pages315-316 of the RHP for the full text of the Disclaimer Clause of SEBI.
Disclaimer clause of BSE: It is to be distinctly understood that the permission given by BSE Limited should not in any way be deemed or construed that the RHP has been cleared or approved by BSE Limited nor does it certify the correctness or completeness of any of the contents of the RHP. Potential investors are advised to refer to the page 320 of the RHP for the full text of the disclaimer clause of the BSE Limited.
Disclaimer clause of NSE: It is to be distinctly understood that the permission given by NSE should not in any way be deemed or construed that the offer document has been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the offer document. Potential investors are advised to refer to page 320 of the RHP for the full text of the disclaimer clause of NSE.
CONTENTS OF THE MEMORANDUM OF ASSOCIATION OF THE COMPANY AS REGARDS ITS OBJECTS: For information on the main objects of the Company, investors are requested to see “History and Certain Corporate Matters” beginning on page 178 of the RHP. The Memorandum of Association of the Company is a material document for inspection in relation to the Issue. For further details, see “Material Contracts and Documents for Inspection” beginning on page 396 of the RHP.
LIABILITY OF THE MEMBERS OF THE COMPANY: Limited by shares.
Amount of share capital of the Company and capital structure: The authorised, issued, subscribed and paid up share capital of the Company as on the date of the RHP is as follows: The authorised share capital of the Company is Rs. 700,000,000 divided into 70,000,000 Equity Shares of Rs.10 each.The pre-Offerissued, subscribed and paid-up Equity Share capital of the Company is Rs. 455,555,750 divided into 45,555,575 Equity Shares of face value of ₹ 10 each. For details, please see the section titled “Capital Structure” beginning on page 71 of the RHP.
Names of signatories to the Memorandum of Association of the Company and the number of Equity Shares subscribed by them: The names of the signatories of the Memorandum of Association of our Company are Hemant Jalan, Kamala Prasad Jalan and Anita Jalanwith each subscribing to 100 equity shares, respectively, of face value of Rs. 10 per equity share as initial subscription.
AVAILABILITYOF THE RHP: Investors are advised to refer to the RHP and the Risk Factors beginning on page 23 of the RHP, contained therein before applying in the Offer. Full copy of the RHP is available on the website of SEBI at www.sebi.gov.in, website of the BRLMs, i.e. at www.investmentbank.kotak.com, www.edelweissfin.com, www.icicisecurities.com, respectively and on the websites of BSE and NSE at www.bseindia.com and www.nseindia.com, respectively. AVAILABILITYOF BID CUM APPLICATION FORMS: Bid cum Application Forms can be obtained from the Registered Office and Corporate Office of Indigo Paints Limited, Tel: 91 20 6681 4300;BRLMs: Kotak Mahindra Capital Company Limited, Tel: +91 22 4336 0000, Edelweiss Financial Services Limited, Tel: +91 22 4009 4400, ICICI Securities Limited, Tel: +91 22 2288 2460and Syndicate Members : Kotak Securities Limited, Tel: +91 22 6218 5470, Edelweiss Broking Limited, Tel: +91 22 4063 5569 / +91 22 4063 5411, at the select locations of the Sub-syndicate Members (as given below), SCSBs, Registered Brokers, RTAs and CDPs participating in the Offer. Bid Cum Application Forms will also be available on the websites of BSE and NSE and the Designated Branches of SCSBs, the list of which is available at websites of the Stock Exchanges and SEBI. Sub-Syndicate Members: Amrapali Capital & Finance Services Ltd.; Anand Rathi Finance Services Limited; Anand Rathi Share & Stock Brokers Ltd.; Axis Capital Limited; Centrum Broking Limited; Choice Equity Broking Private Limited; Dalal & Broacha Stock Broking Private Limited; DB(International) Stock Brokers Ltd.; Edelweiss Broking Ltd.; Eureka Stock & Share Broking Services Ltd.; Globe Capital Market Limited; ICICI Securities Limited; IDBI Capital Markets & Securities Limited; JM Financial Services Limited; Jobanputra Fiscal Services Private Limited; Keynote Capitals Limited; KJMC Capital Market Services Limited; LKP Securities Limited; lnventure Growth & Securities Ltd.; Motilal Oswal Securities Limited; Nirmal Bang Securities Pvt. Ltd.; Prabhudas Liladhar Pvt Ltd.; Pravin Ratilal Share & Stock Brokers Limited; RR Equity Brokers Private Limited; SAFAL Capital (INDIA) Limited; SBIcap Securities Limited; Sharekhan Ltd.; SMC Global Securities Ltd.; Systematix Shares & Stocks (India) Limited; Trade Bulls Securities (P) Ltd.; Viren M Shah; Way2Wealth Brokers Private Limited and YES Securities (India) Limited.. Banker to the Offer/ Escrow Collection Bank/ Refund Bank/ Public Offer Bank/ Sponsor Bank: ICICI Bank Limited.
About Indigo Paints Ltd.
Indigo Paints is amongst the fastest growing among the top five paint companies in India. It is the fifth largest company in the Indian decorative paint industry in terms of revenue from operations for Fiscal 2020 (Source: F&S Report). Headquartered in Pune, Indigo Paints offers a complete range of decorative paints including emulsions, enamels, wood coatings, distempers, primers, putties and cement paints. As on September 30, 2020, the Company owns and operates 3 manufacturing facilities located in Jodhpur (Rajasthan), Kochi (Kerala), Pudukkottai (Tamil Nadu). These facilities had an aggregate installed production capacity of 101,903 kilo litres per annum (“KLPA”) for liquid paints and 93,118 metric tonnes per annum (“MTPA”) for putties and powder paints as of September 30, 2020. The Company has an extensive distribution network across 27 states and 7 union territories as of September 30, 2020.