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JSW Paints acquires 74.5% stake in Akzo Nobel India (at 15% discount); set to become 4th largest player in decorative paint Industry

ICICIdirect Research 27 Jun 2025 DISCLAIMER

JSW Paints has signed the agreement with Akzo Nobel BV to acquire 74.46% stake in Akzo Nobel India’s business for Rs.9000 cr at price of Rs.2762 per share which is 15% lower than its closing price as of June 26th. Additionally, JSW Paints also triggered an open offer for the 24.66% share at a price of Rs.3417.8 per share.


Deal is valued at 2.7x FY27E EV/Sales; 17x FY27E EV/Sales and 26x its FY27E EPS, which is at discount to industry average. Discounted valuation can be attributed to lower contribution from decorative paints segment compared with peers and lower distribution touch points vs industry leader.

Decorative paints biz constitutes ~45% of overall revenues of Akzo Nobel India while industrial and project business constitutes around 40% of revenues and 15% comes from coating which Akzo Nobel has sold to its parent company.

Akzo Nobel has paints capacity of ~2,50,000 Kilo Litre(Kl) while JSW Paints has ~1,70,000Kl capacity. Post the acquisition, JSW Paints would have capacity of ~4,20,000Kl capacity which takes it to 4th position in terms of capacity in India in decorative paints behind Asian Paints (18,50,000 Kl), Berger Paints (15,00,000 Kl) and Grasim (10,96,000 kl).

Akzo Nobel has retail touch points of 22,000+ which is less compared with Asian Paints having retail touch points of 1,69,000 touchpoints and Berger Paints with 64,000 retail touch points. 

View: Post acquisition, JSW Paints will be 4th largest players in the domestic decorative paints Industry in view of capacity. We expect the competitive environment to persist in the paint industry with large players focus on gaining or retaining market share. We expect JSW paints to invest in the product innovation and would focus on expanding the distribution reach in the coming years to remain competitive in the market. Hence, we believe the margins of paint companies to remain under pressure, which will continue to take a toll on the valuations of the paint companies in the near term.

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