Quote on Indigo grey market premium By Keshav Lahoti, Angel Broking
Below are Quote on Indigo grey market premium By Mr. Keshav Lahoti, Associate Equity Analyst, Angel Broking Ltd
“On a trailing PE basis, Asian Paints, Berger Paints, Kansai Nerolac and Akzo Nobel are trading at 116.6x, 150.0x, 93.0x and 62.1x respectively. Whereas, Indigo Paints is priced at 98.4x PE on a trailing basis. So on a trailing PE basis, Indigo Paints valuation is in line with the average of top four paint companies. Company’s revenue from operations have grown at a CAGR of 41.9% between Fiscal 2010 and Fiscal 2019, compared to the range of 12.1% to 13.1% recorded by the top four paint companies in India. In future, the company is expected to gain market share and outperform its peers in terms of growth, due to the strong management team, strategies planned by the company and smaller base compared to top four players. Market looks at forward multiples, so the company is trading at a hefty grey market premium. During an IPO launch, the company prefers to leave value for new investors so that the IPO receives a good response and becomes successful. Indigo Paints grey market premium is 50-60% above issue price.”
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