Large cap stock falls after company sells stake worth ₹734 Cr in Akzo Nobel India

Synopsis:
Asian Paints, a large-cap home decor company, doubled its initial investment from FY18 and earned ₹734 crores after selling its share in Akzo Nobel India.

The shares of this Large cap home decor company are trending in the news after doubling its investment, followed by a stake sale in one of the leading paint manufacturers. Check it out.

With a market capitalization of Rs. 2,37,075 crores, the shares of Asian Paints were trading at Rs. 2472, down by 1.1 percent from its previous day’s closing price of Rs. 2498.75

About the Bulk Deals

On Wednesday, Asian Paints sold their entire stake of 4.42 percent in Azko Nobel India ltd. They sold ~20 lakh of shares worth ~Rs. 734 crores at an average price of Rs.3651 per share.Given that Asian Paints made an initial investment of Rs. 360 crores in FY18, this sale has more than doubled their investment.

This divestment follows JSW Paints announcement that it had paid Rs. 8,986 crore to acquire a 74.76 percent controlling stake in Akzo Nobel India, the biggest deal in the country’s paint history.

Asian Paints is the biggest home décor company in India. It has been in business for more than 80 years and has well-known brands like Asian Paints and Apco. The company’s products include wall paints, wall coverings, uPVC windows, waterproofing, texture painting, wall stickers, adhesives, mechanized tools, modular kitchens, sanitaryware, lighting, and soft furnishings. 

At the movement company P/E is 60.7x as compared to industry P/E of 43.2x. Its sales have declined from 4.5 percent from Rs. 35495 Crores in FY24 to Rs. 33906 Crores in FY25. The company Debt to equity ratio is 0.12 whereas ROE and ROCE is 20.6 percent and 25.7 percent respectively.

Written By Akshay Sanghavi

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