Indigo Paints takes to aggressive advertising to improve brand recognition
Established in 2000, Indigo Paints is a relatively new entrant to the decorative paints industry that is dominated by the like of Asian Paints, Berger and Nerolac.
Established in 2000, Indigo Paints is a relatively new entrant to the decorative paints industry that is dominated by the like of Asian Paints, Berger and Nerolac. With little to distinguish one product from another, the industry has a high barrier for new entrants in terms of brand recognition.
To overcome that, the Pune-based paint maker is adopting aggressive advertising. It spent close to Rs 60 crore in FY19 on its television ad campaigns, according to Hemant Jalan, founder and managing director of Indigo Paints. The company’s revenue for the fiscal was Rs 595 crore.
“It has done wonders for us,” Jalan told ET, explaining how the better brand recognition has helped the company increase its customer touch-points. The company has roped in cricketer and ex-Indian skipper Mahendra Singh Dhoni as its brand ambassador.
Jalan said that his company’s compounded growth rate for the past 10 years has been in excess of 40%, and he doesn’t expect that to change for the coming four to five years as the company increases its geographic reach across the country and improves penetration in the states where it has only recently entered.
“The industry itself is growing at 10%-12% year-on-year and there is enough room for all manufacturers to grow,” he said.
The company is planning to go public in the latter half of FY21 to raise capital for expansion and give initial investor Sequoia Capital an opportunity to make an exit. Sequoia holds about 38% equity in Indigo Paints.
In the ongoing fiscal, the company has planned an expenditure of Rs 75 crore on advertisements while the projected revenue is at Rs 800 crore.
For perspective, the revenue for market leader Asian Paints in FY19 was Rs 16,400 crore, according to regulatory filings. And that of Nerolac was Rs 5,400 crore.