Indigo Paints Limited which had tapped the capital markets with its fresh issue for Rs 300 crs and an offer for sale of 58.40 lac shares was oversubscribed 117.02 times. The price band of the issue was Rs 1480-1490. The issue was open from Wednesday the 20th of January to Friday the 22nd of January.
The QIB portion was subscribed 189.57 times, HNI portion was subscribed 263.05 times, Retail portion was subscribed 15.93 times while Employee portion was subscribed 2.5 times. There were 30,21,267 applications and on the basis of number of lots the retail portion was subscribed 11.09 times. In terms of number of forms this is the most subscribed issue beating the previous highest of Mazagon Dock which had received 26.32 lac applications. It also beat the likes of Mrs Bector which had received 25.82 lac shares and just concluded IRFC which received 25.51 lac applications.
The company had earlier allotted 23,35,020 equity shares to 25 anchor investors comprising of 35 entities. The highest allocation was made to Smallcap World Fund who was allotted 2,67,940 equity shares or 11.5% of the anchor portion.
The HNI portion garnered subscription of Rs 45,760 crs. The overall issue garnered subscription of Rs 96,222 crs. The cost of funding for this issue is Rs 600-605 for the leveraged HNI. The discussion paper for NBFC’s released by Reserve Bank of India has proposed a limit of Rs 1 cr per person for funding of IPO application. This would have a big impact on subscription levels of IPO’s in the HNI categories, once the same is implemented. It would then be crucial to see how merchant bankers and promoters’ price their issue, considering the fact that interest cost being added to the issue price would not happen as subscription levels would drop.
Indigo Paints Subscription
| Bucket Size | Shares Applied for | Times Oversubscribed | |
| QIB | 1556690 | 295096470 | 189.57 |
| HNI | 1167514 | 307117820 | 263.05 |
| Retail | 2724198 | 43401190 | 15.93 |
| Employee | 70000 | 174650 | 2.50 |
| Total | 5518402 | 645790130 | 117.02 |
In an interesting development to coincide with the successful launch of the Indigo Paints issue, Grasim Industries has announced its foray into the lucrative paints business. The company plans a capex of Rs 5,000 crs to set up multi location plants and aims to be the number 2 paint company going forward. Interesting times for this industry which has been clocking decent growth numbers.
