After the state-run insurance behemoth Life Insurance Corporation of India (LIC) increased its ownership holding in Asian Paints, the company’s share price increased by more than one per cent on Wednesday. On the BSE, Asian Paints’ stock increased by up to 1.59% to ₹2,427.80 a share.
Through open market purchases, LIC reported raising its stake in Asian Paints to 7% this year, at an average price of ₹2,891.25 per share.
“Life Insurance Corporation of India has increased its shareholding in equity shares of Asian Paints Ltd. from 4,79,66,302 to 6,72,40,527 i.e., 5.001% to 7.010% of the paid-up capital of the said Company,” LIC said in a stock exchange filing.
LIC stated that the acquisition was a component of its investment plan in the regular course of business and that there was a net rise of 2.009% in holdings between January 1 and December 9, 2024.
With a market valuation of around ₹2.30 lakh crore, Asian Paints is a major force in the paint and coatings sector. LIC’s increase in its ownership of the business comes as the paint manufacturer is navigating difficulties brought on by a low level of urban demand and growing competition due to the high cost of raw ingredients.
Raamdeo Agrawal, a seasoned investor, is now attempting to acquire India’s biggest paintmaker by relying on his “bruised blue chips” hypothesis, which advocates investing in reputable, sizable businesses during difficult times.
“Nothing comes to my mind which is that bruised a blue chip besides Asian Paints,” he said, referring to a near 30% year-to-date decline in the shares of Asian Paints as India’s consumption growth eased.
The chairman and co-founder of Motilal Oswal Financial Services stated that Asian Paints Ltd. is one business he regrets not investing in sooner.
“It is iconic. I missed it three times. I have been watching it since the 1980s and I have still not made a single penny out of it. But this time, I think I am going to make money,” Agrawal said.
In the September quarter of FY25, Asian Paints’ consolidated net profit fell 42.4% year-on-year (YoY) to ₹694.64 crore, resulting in poor Q2 performance. Revenue for the company fell 5.3% to ₹8,003.02 crore in Q2FY25 from ₹8,451.93 crore in the same quarter the previous year.
The managing director and CEO of Asian Paints, Amit Syngle, emphasized that the paint sector encountered a low level of demand throughout the quarter.
According to him, dampened consumer attitudes as well as prolonged rains and floods in some regions of the country contributed to a 5.5% reduction in domestic coatings revenue for the quarter, while the company’s domestic decorative coatings segment volumes decreased slightly.
Asian Paints: Share Price Trend
This year, Asian Paints’ share price has been steadily declining. Asian Paints shares have fallen 29% year-to-date (YTD), while the Sensex has gained over 12%. The stock has dropped more than 4% in a single month and more than 28% in three months.
Asian Paints’ stock was up 1.26% at ₹2419.80 per share on the BSE at 2:20 PM.
