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News: According to media reports, Reliance Industries is likely to sell its entire 4.9% stake in Asian Paints which it bought for Rs.500cr in 2008. At the current market price investment is valued at Rs.11141cr. Media reports indicates that the stake sell will happen through block deal at 6-7% discount to the current market price (valued at Rs10,263-Rs10.918crore).
View: Asian Paints stock has been underperforming for last one year due to muted earnings performance for past four to five quarters affected slowdown in the consumer demand and heightened competition from the large player such as Birla Opus. The stock is down by ~30% from its high. Reliance selling 5% stake at a discount of 6-7% might lead to further sentimental impact on the stock price.
Impact: Negative