Shares of Asian Paints rose 2.5% on June 12 after a block deal involving shares worth ₹7,703 crore hit the counter. As many as 3.5 crore shares of Asian Paints, equivalent to a 3.64% stake, changed hands in the block window, according to reports.
The transaction was reportedly executed at a floor price of ₹2,201 per share, largely at par with the last closing price of the stock. However, details about the buyers and sellers involved in the transaction could not be immediately identified.
Despite the lack of official confirmation, murmurs in the market suggests that Reliance Industries may have been the seller in the transaction. Reliance, through its investment arm Ojasvi Trading, holds a 4.9% stake in Asian Paints. This stake was acquired nearly two decades ago, in January 2008, for around ₹500 crore. The investment came at a time when global markets were reeling from the financial crisis and the collapse of Lehman Brothers. A month ago, The Economic Times had reported that Reliance was looking to sell its entire 4.9% stake in the company.
The latest development comes against a challenging backdrop for Asian Paints. Despite being a long-standing market leader, the company has found itself under the heat of intensifying competition in recent years.
Over the past three years, its stock has been among the worst performers in the Nifty 50 index, shedding nearly 17% of its value. The arrival of Grasim’s Birla Opus has intensified competition in the paints segment, posing a threat to Asian Paints' dominance. As a result, the company’s market share has slipped from 59% to 52% in FY25, a major erosion of its once-formidable lead.
Earlier this week, Asian Paints was dealt another blow when global brokerage Morgan Stanley assigned its lowest-ever price target for the stock. It became the third brokerage to set a target below the ₹2,000 mark. Morgan Stanley warned that Asian Paints could continue to lose market share over the next three years, after already losing 424 basis points in the previous financial year, a figure that lagged their original estimates.
In its bear-case scenario, Morgan Stanley has projected a price target of ₹1,307, factoring in the possibility of intensified competition, lacklustre volume growth, and continued pressure on profit margins.
