Asian Paints Share Price Falls 2% as Reliance Plans Exit from 4.9% Stake

Market Movement: Asian Paints Share Price Under Pressure

Asian Paints' share price slipped nearly 2% in early trade on May 14, reacting to reports that Reliance Industries plans to sell its 4.9% stake in the paint major. The stock touched an intraday low of ₹2,280.50, before recovering slightly to trade at ₹2,294.65, down 1.3% by 11:20 am.

This downward movement comes amid sustained selling pressure in the stock, which is already down 20% over the past year and has declined 33% from its 52-week high of ₹3,394.

Stake Sale Buzz: Reliance's Exit Plan

As per reports, Reliance has revived its plan to offload its 4.9% holding in Asian Paints, with Bank of America (BofA) managing the proposed deal. Reliance initially acquired this stake in 2008 for around ₹500 crore.

• Current stake value (as per ₹2,325.10 closing price): ₹10,925 crore
• Initial investment: ₹500 crore (2008)

This is not the first time Reliance has explored exiting its position in Asian Paints. A similar attempt was considered in 2020, although it did not materialize.

Business Performance and Competitive Landscape

Asian Paints faces intensifying competition in the paints sector, especially from Grasim Industries' Birla Opus, which has rapidly gained ground since its entry.

• Asian Paints' market share: Dropped from 59% to 52% in FY25
• Birla Opus' market share: Reached 6.8% in the latest quarter

In its recent Q4 earnings call, Asian Paints acknowledged the growing threat from new players, stating that market share could face continued pressure unless the competitive environment stabilizes.

Financial Snapshot: Q4 FY25 Results

Revenue

• Declined 4.3% YoY to ₹8,358.91 crore
• Previous year (Q4FY24): ₹8,730.76 crore

EBITDA (PBDIT)

• Dropped 15% YoY to ₹1,436 crore

EBITDA Margins

• Compressed to 17.2%, down from 19.4% in Q4FY24

Net Profit

• Fell 45% YoY to ₹692.13 crore
• Previous year: ₹1,256.72 crore

Company Outlook and Future Challenges

The declining share price of Asian Paints reflects investor concern over the company's ability to sustain its market leadership amid increased competition and shrinking margins. While the brand continues to focus on balancing value offerings and profitability, near-term challenges persist due to soft demand and rising market rivalry.

Summary

The Asian Paints share price came under pressure following news of Reliance Industries' plan to sell its 4.9% stake, currently valued at over ₹10,900 crore. Coupled with weak quarterly results and an erosion in market share, the stock faces multiple headwinds. The coming quarters will be crucial as Asian Paints strategizes to defend its leadership in an increasingly crowded paint market.