Indigo Paints, IRFC IPOs to hit markets; here's all you need to know

Two IPOs will hit the markets next week to raise Rs 5,600 crore cumulatively.

State-owned IRFC will be the maiden IPO of 2021 as its public offer is set to open for subscription on January 18 with a price band of Rs 25-26 per share.

Besides being the maiden IPO of 2021, IRFC is the first NBFC in the PSU sector to go public.

IRFC is a dedicated financing arm of Indian Railways for mobilising funds from domestic as well as overseas markets.

About The Offer

The company aims to raise Rs 4,633.4 crore at the higher end of the price band.

It is offering up to 178.2 crore shares that consist of a fresh issue of 118.8 crore shares and an Offer For Sale (OFS) of 59.4 crore shares by government.

Retail investors can bid for a lot of minimum of 575 shares and multiples of 575 shares thereafter.

The issue includes a reservation of equity shares worth Rs 50 lakh for subscription by eligible employees. The issue will constitute up to 13.64 per cent of the post-issue paid-up equity share capital of the company.

Net fresh issue proceeds will be utilised for augmenting equity capital base to meet future capital requirements and general corporate purposes.

The central government will receive OFS proceeds.

The book running lead managers to the issue are DAM Capital Advisors, HSBC Securities and Capital Markets (India), ICICI Securities and SBI Capital Markets.

The other company set to make its debut on the bourses next week is Indigo Paints.

The Pune-based company is the first to start manufacturing differentiated products like Metallic Emulsions, Bright Ceiling Coat Emulsions, Tile Coat Emulsions, Dirtproof & Waterproof Exterior Laminate, Floor Coat Emulsions, Exterior and Interior Acrylic Laminate, and PU Super Gloss Enamel.

In terms of revenue, it is the fifth-largest company in the decorative paint industry.

The Issue

Sequoia Capital-backed Indigo Paints will open for subscription on January 20 and close on January 22.

It is looking to raise Rs 1,000 crore from the capital markets with a combination of fresh issuance and an OFS by existing shareholders of the company.

Price Band

The price band will be between Rs 1,480 and Rs 1,500 per share. The minimum bid (lot size) will be 10 shares and the face value will be Rs 10 per share.

The firm will not receive any funds from the OFS proceeds.

From the fresh issue proceeds, it plans to fund capital expenditure for expansion.

Along with this, it plans to purchase tinting machines and gyroshakers and repay/prepay all or certain borrowings of the firm.