Reliance Industries offloads 3.5 crore shares in Asian Paints worth over ₹7,700 crore

Reliance Industries Limited (RIL) has pared its holding in Asian Paints by offloading 3.5 crore shares, marking a significant exit from one of India’s leading blue-chip companies. The sale, conducted through its wholly owned subsidiary Siddhant Commercials Limited, fetched ₹2,201 per share—translating into a total deal size of ₹7,703.5 crore.

The transaction, carried out via block deals in the pre-market session on Thursday, saw approximately 3.64 percent of Asian Paints’ equity change hands. RIL still retains a minority stake of 87 lakh shares in the paint maker after this sale, which falls under Regulation 30 of SEBI’s Listing Obligations and Disclosure Requirements (LODR).

Stake Built During Crisis, Trimmed Amidst Competitive Pressures

Reliance had acquired its stake in Asian Paints back in January 2008, investing ₹500 crore during the global financial crisis. That strategic bet paid off handsomely, as the shareholding appreciated significantly over the years, although the stock has underperformed in recent times.

Asian Paints’ shares have declined by 17 percent over the past three years, making it one of the weakest performers among Nifty blue chips. Analysts attribute the erosion to intensified competition, particularly from Aditya Birla Group’s new entrant, Birla Opus Paints. According to Elara Securities, Asian Paints’ market share has fallen from 59 percent to 52 percent in FY25—a significant loss in a highly competitive market.

This underperformance is compounded by revenue stagnation, with the company reporting subdued growth over four consecutive quarters. Despite falling raw material costs, gross margins have compressed due to rising rebates and aggressive pricing by competitors. In a recent investor call, CEO Amit Syngle acknowledged the pressure, stating that the company would need to take “calibrated action” to defend its leadership.

Market and Institutional Response

The block trade has reshuffled the shareholding dynamics of Asian Paints. As of March 2025, Siddhant Commercials held a 4.9 percent stake, much of which has now been liquidated. Domestic mutual funds continue to maintain a significant presence, collectively holding a 5.67 percent stake. ICICI Prudential and SBI Mutual Fund hold 1.24 percent and 1.51 percent, respectively.

Meanwhile, the Life Insurance Corporation of India (LIC) remains the largest public shareholder in Asian Paints with an 8.29 percent stake. Retail investors too hold a meaningful share—11.84 percent—spread across 11.73 crore small shareholders with holdings under ₹2 lakh.

Brokerages have turned cautious. Nuvama Institutional Equities recently downgraded Asian Paints, cutting its FY26–FY27 earnings estimates by 6–8 percent. The brokerage sees only a 7.2 percent compound annual growth rate in earnings per share through FY28. It has trimmed the stock’s target price to ₹2,200—just around the price at which Reliance exited—and assigned a valuation of 45x forward earnings, nearly 20 percent lower than the 10-year average.

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