Indigo Paints the town red with a blockbuster listing. Can it keep its growth lustre intact?

Illustration by Manali Ghosh

Synopsis
Indigo Paints debuted on the bourses on February 2 at a 75% premium on its issue price. The company has maintained a 25% CAGR and scored 27.5% RoCE for FY20, albeit on a small base. So, is the stock fairly valued? Given the peculiar nature of India’s paints industry, several factors could constrain Indigo Paints’ growth in the longer term.

Every year, there are initial public offers (IPOs) that become the talk of the town for their blockbuster debuts. This year, so far, Indigo Paints’ IPO has been one such instance. A far fifth by market share in the rather organised decorative-paints industry, Pune-based Indigo Paints debuted on the bourses on February 2 at a 75% premium on its issue price. The issue was oversubscribed 117 times. According to data company Refinitiv, it is trading