Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

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Indigo Paints (IP) raised around US$160m in its India IPO and will start trading tomorrow. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.
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I've covered the background and company performance in my previous insight, <a href="https://www.smartkarma.com/insights/indigo-paints-ipo-growing-fast-but-future-growth-won-t-come-as-easy" target="_blank" rel="noopener">Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy</a> and <a href="https://www.smartkarma.com/insights/indigo-paints-ipo-not-leaving-a-whole-lot-on-the-table" target="_blank" rel="noopener">Indigo Paints IPO - Not Leaving a Whole Lot on the Table</a>.
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In this insight, I'll talk about deal updates and provide a table with implied valuations at different share price levels.
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Indigo Paints (IP) raised around US$160m in its India IPO and will start trading tomorrow. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.


I've covered the background and company performance in my previous insight, Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy and Indigo Paints IPO - Not Leaving a Whole Lot on the Table.


In this insight, I'll talk about deal updates and provide a table with implied valuations at different share price levels.


Indigo Paints IPO Trading - Already the Most Expensive Amongst Peers

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Indigo Paints has been growing at a stellar pace within Indian market after expanding production capacity through the acquisition of facilities in Kerala and Tamil Nadu. The company also offers a relatively unique strategic take on the market, differentiating itself from the top four, Asian Paints, Berger Paints, Kansai Nerolac Paints and Akzo Nobel India. The question is how sustainable the growth in market share will be.

Indigo Paints has been growing at a stellar pace within Indian market after expanding production capacity through the acquisition of facilities in Kerala and Tamil Nadu. The company also offers a relatively unique strategic take on the market, differentiating itself from the top four, Asian Paints, Berger Paints, Kansai Nerolac Paints and Akzo Nobel India. The question is how sustainable the growth in market share will be.

Indigo Paints (IP) aims to raise around US$160m in its India IPO. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.I've covered the background and company performance in my previous insight, <a href="https://www.smartkarma.com/insights/indigo-paints-ipo-growing-fast-but-future-growth-won-t-come-as-easy" target="_blank" rel="noopener">Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy</a>.In this insight, I'll talk about earnings forecast and valuations.

Indigo Paints (IP) aims to raise around US$160m in its India IPO. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.I've covered the background and company performance in my previous insight, Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy.In this insight, I'll talk about earnings forecast and valuations.

Indigo Paints IPO - Not Leaving a Whole Lot on the Table

Indigo Paints (IP) aims to raise around US$165m in its India IPO. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.Revenue from operations have grown at 41.9% CAGR over FY10-19 and 24.7% CAGR over FY18-20. Margins have been on an uptrend as well and hence, over FY18-20, gross profit grew at 36% CAGE, EBITDA at 87.8% and PATMI at 92.8%. The company has adopted a strategy of targeting smaller cities and rural areas to build its dealer network and then work its way up to the larger cities. It also claims to have introduced a host of differentiated products which have helped in brand building.IP aims to expand its distribution network further, and is focusing on installing tinting machines. However, it hasn’t been able to ramp-up the installation per year. In addition, some of the margin gains recorded over 6M21 might not be sustainable.

Indigo Paints (IP) aims to raise around US$165m in its India IPO. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.Revenue from operations have grown at 41.9% CAGR over FY10-19 and 24.7% CAGR over FY18-20. Margins have been on an uptrend as well and hence, over FY18-20, gross profit grew at 36% CAGE, EBITDA at 87.8% and PATMI at 92.8%. The company has adopted a strategy of targeting smaller cities and rural areas to build its dealer network and then work its way up to the larger cities. It also claims to have introduced a host of differentiated products which have helped in brand building.IP aims to expand its distribution network further, and is focusing on installing tinting machines. However, it hasn’t been able to ramp-up the installation per year. In addition, some of the margin gains recorded over 6M21 might not be sustainable.

Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

We are no longer recommending an overweight to China (MSCI China) due to recent RS deterioration. Our favorite countries remain Taiwan (TAIEX) and India (SENSEX), while Brazil (Bovespa) and South Korea (KOSPI) display improving price and RS trends -- add exposure. MSCI EM Technology and Materials are our top two Sector overweights. Additionally, the EM Health Care Sector shows bullish price and RS inflections, making it a timely Sector to add exposure to at current levels.

We are no longer recommending an overweight to China (MSCI China) due to recent RS deterioration. Our favorite countries remain Taiwan (TAIEX) and India (SENSEX), while Brazil (Bovespa) and South Korea (KOSPI) display improving price and RS trends -- add exposure. MSCI EM Technology and Materials are our top two Sector overweights. Additionally, the EM Health Care Sector shows bullish price and RS inflections, making it a timely Sector to add exposure to at current levels.

Overweight EM Vs. EAFE; Dollar Weakness Continues

India

Berger Paints India Limited manufactures and distributes paints, enamels, varnishes, and synthetic resins. The Company's products are used in home, office, factory, interiors, exteriors, metal, wood, plastic, and others.

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Berger Paints India (BRGR IN)

Indigo Paints IPO Trading - Already the Most Expensive Amongst Peers

Indigo Paints (IP) raised around US$160m in its India IPO and will start trading tomorrow. It was the 5th largest in the Indian decorative paint...

Sumeet Singh

Indigo Paints IPO – Tinting on Up

Indigo Paints offers a very interesting growth profile combined with some tantalising potential for margin expansion. The question is, does this...

Mio Kato

Indigo Paints IPO - Not Leaving a Whole Lot on the Table

Indigo Paints (IP) aims to raise around US$160m in its India IPO. It was the fifth largest company in the Indian decorative paint industry and was...

Sumeet Singh

Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy

Indigo Paints aims to raise around US$165m in its India IPO. Revenue grew at 41.9% CAGR over FY10-19. Over FY18-20, Revenue grew at 24.7% CAGR,...

Sumeet Singh

Overweight EM Vs. EAFE; Dollar Weakness Continues

Our favorite countries remain Taiwan (TAIEX) and India (SENSEX), while Brazil (Bovespa) and South Korea (KOSPI) display improving price and RS...

Vermilion Research

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