Reliance Industries Limited, a huge company involved in many businesses like energy and telecommunications, and controlled by Mukesh Ambani—India’s richest person—has recently sold most of its shares in Asian Paints. This sale was worth about 77 billion Indian rupees, or around $895 million in US dollars. The sale comes at a time when the paint industry in India is facing tough competition and weaker demand.
The shares were sold through a big trade by one of Reliance’s units called Siddhant Commercials. Siddhant sold 35 million shares, which was about 3.7% of Asian Paints.
The shares were sold at 2,201 rupees each, according to a report filed with the stock exchange on Thursday. Even after this sale, Reliance will still own about 8.7 million shares in Asian Paints, keeping a smaller but important stake in the company.
Reliance first invested in Asian Paints almost 20 years ago, showing a long relationship with this leading Indian paint maker. But recently, Reliance has been slowly reducing its share because of several challenges in the industry. The demand for paints has dropped due to the overall economic slowdown, and new competitors have made the market tougher.
One big competitor is Birla Opus, a company backed by billionaire Kumar Birla, which has been challenging big companies like Asian Paints. Indian brokerage firm Geojit, supported by BNP Paribas, recently warned investors to be careful about Asian Paints.
They said demand for paints is expected to stay weak in the coming months and the growing competition will hurt Asian Paints’ future business. Geojit advised investors to reduce their shares in Asian Paints. The stock price has already fallen more than 30% in 2024, showing the tough times the company faces.
Mukesh Ambani’s net worth is about $119.5 billion, making him the richest person in India, according to Forbes Asia’s list published last October. Ambani is the chairman and managing director of Reliance Industries Limited. Under his leadership, Reliance has grown into one of India’s biggest and most powerful companies, working in many areas like energy, chemicals, telecom, retail, media, and finance.
Experts see Reliance’s decision to sell most of its Asian Paints shares as a smart move because the paint market is changing fast and becoming more competitive.
Even though Reliance sold a big part of its stake, it still holds some shares, showing it is interested in Asian Paints’ future but wants to be careful because of the current challenges.
