Shares in Indigo Paints hit the 20 pc at Rs.3129 per share on its stock market debut on Tuesday, taking the first-day premium to 110 pc over the issue price on the NSE and BSE.

The stock was locked at Rs 3,129 per share on BSE with nearly 11.3 lakh pending buy orders across exchanges and no seller in sight.

A bumper debut on the stocks exchanges multiplied the value of Indigo Paints Ltd, making it the fifth company this financial year to have given 100% returns on listing.

After listing at a premium of 75% to the issue price, shares of Indigo Paints extended gains to end 109% higher at 3,117.15 rupees. The euphoria in the equity market after the Budget and demand from retail investors, on hopes of the company being able to maintain robust growth, drove the share price higher.

The recent entry of Grasim Industries in the paints market has also boosted the outlook for the sector, as more corporate interest in a high-entry barrier industry is seen as a sign of their confidence in the growth visibility, said the head of research at a bank-sponsored brokerage. Indigo Paints has better gross margins than most peers due to higher pricing power in ingeniously-developed products and strategic placement of manufacturing units. The company's higher presence in rural markets compared to metropolitan areas is also seen advantageous as smaller cities and towns have bounced back from the pandemic

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