The Indian paint industry is witnessing a seismic shift, with a major development that could redefine market dynamics. Reports suggest that JSW Paints is on the verge of acquiring AkzoNobel India, the company behind the well-known Dulux brand, in a deal valued around ₹10,000 crore (approximately $1.1 billion). Although the official confirmation is still pending, industry insiders and reports hint that the deal is almost finalized and could be announced by mid-June.
This acquisition, if completed, marks a significant move by JSW Paints to strengthen its presence in an increasingly competitive sector. Over the past few years, the entry of large conglomerates such as the Aditya Birla Group has intensified competition in the paint market, putting pressure on established players like Asian Paints, Berger Paints, and Nerolac.
The interest shown by JSW Paints in acquiring AkzoNobel's India operations is not sudden. Earlier, JSW Group promoters had offloaded a substantial stake in JSW Infrastructure, signaling their intent to raise capital for strategic investments. With AkzoNobel expressing interest in exiting the Indian market due to stiff competition, the dots are now connecting—JSW Paints is the most probable buyer.
AkzoNobel is not just any company; it's one of the global giants in the paint industry. In India, it held a position among the top five players, primarily driven by its strong brand presence through Dulux. However, in the face of fierce competition and evolving market conditions, AkzoNobel appears to be retreating from the Indian landscape.
One of the main reasons for the recent drop in AkzoNobel’s stock price is valuation concerns. The market had expected a valuation of ₹12,000 to ₹13,000 crore, but the deal seems to be priced at a 25% discount, triggering negative investor sentiment.
Post-acquisition, JSW Paints is expected to climb to the fourth position in the decorative paint segment and the second position in the industrial paint segment in India. This will provide JSW a significant advantage and a broader market reach.
Interestingly, the paint industry is undergoing a transformation due to increased infrastructure and construction activities, especially in Tier 2 and Tier 3 cities. This is creating fresh opportunities and growing demand for decorative and industrial paints. Recognizing this trend, the Aditya Birla Group aggressively expanded its paint division—Birla Opus. Within just two years, Birla Opus has gained a market share of 6.8% and surpassed Berger Paints in terms of manufacturing capacity.
Currently, Asian Paints holds the top spot with a capacity of 1850 million liters per annum (MLPA), followed by Birla Opus with 1096 MLPA. Berger Paints has now fallen behind in this metric. Birla’s ambitious target is to reach 1332 MLPA, indicating their long-term commitment to the sector.
However, increasing manufacturing capacity is only half the battle. These paints must also sell. Birla Opus seems confident in their strategy and is banking on strong future sales to support their massive capacity investment.
The JSW Group is also strategically positioned to leverage synergies across its businesses—steel, cement, and infrastructure. These sectors are closely tied to construction and housing, providing JSW Paints with a natural customer base and cross-selling opportunities.
Amid these developments, the market leader Asian Paints has seen its market share drop from 59% to 52%, a significant decline that highlights the pressure exerted by new entrants. Though Asian Paints remains a dominant player, the rise of aggressive and well-funded competitors like JSW Paints and Birla Opus poses a serious challenge.
As the sector braces for the official announcement—likely to come by mid-June—industry observers and investors alike are keenly watching how legacy players respond. The era of comfort and dominance in the Indian paint industry may be over. A new phase of innovation, aggressive expansion, and intense competition has begun.
Disclaimer
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