JSW fires a fresh salvo even as paintmakers battle to protect turf

Mint

17 hours ago

Mumbai: India's paintmakers must gird up for a tougher battle from two upstarts.
Birla Opus, owned by billionaire Kumar Mangalam Birla, has already shaken up the nation's paints sector with its pricing war. Now, JSW Paints Ltd's ₹9,300-crore acquisition of Dutch giant AkzoNobel's India unit portends a tighter squeeze on the profitability of their peers as they battle to protect turf.
The deal by JSW Paints, part of billionaire Sajjan Jindal's steel-to-cement empire, will not immediately change the competitive landscape as it merely changes ownership from a multinational to a local player, according to Abneesh Roy, executive director for research at Nuvama Institutional Equities. 'But this is positive for JSW Paints. Over the next five years, we see Kansai, Akzo + JSW, Birla fight for the No. 3,4,5 slots, and also take some share from [other] local players."
The sector is already grappling with tepid demand for decorative paints due to a slowdown in new construction and elongating repainting cycles. Birla Opus' discounting to win over market share is squeezing the profitability of incumbents. India's largest paintmaker Asian Paints Ltd's operating margin shrank to 17.7% in FY25 from 21.4% in FY24.
To be sure, India's paints industry is expected to reach $15.04 billion by 2029, growing at an annualized rate of 9.38% from nearly $9.60 billion in 2024, according to a report by ICICI Direct.
But the entry of two billionaire-led upstarts in the past half a decade has shaken up the long-standing leaderboard. While the exact market shares differ based on products such as decorative and industrial paints and associated materials like coatings and putty, industry insiders estimate that Birla Opus has achieved a podium position this year, and the JSW-AkzoNobel combine is within a striking range of the fourth position.
They estimate the new pecking order as: Asian Paints, Berger Paints India, Birla Opus, Kansai Nerolac, JSW Paints (including Akzo Nobel India) and Indigo Paints.
Analysts at Nuvama expect Asian Paints and Berger Paints to put up a fight to protect their sales. They are also positive on Indigo Paints. The companies are expected to snatch share from unorganized players, who still hold around 25% of the market.
While the two upstarts have cornered market share from the incumbents rapidly, growth may be more challenging from here.
'A proper integration after acquisition is essential. Simply acquiring a company will not make you a strong player overnight. You have to work on multiple things before you are a force to be reckoned with," said an analyst on JSW Paints disrupting the market. He spoke on the condition of anonymity as he is not allowed to comment on an individual company before publishing a report.
The $23-billion JSW Group, which started as a mining company, has diversified across key sectors like infrastructure, cement, e-commerce platforms and paints. JSW Infrastructure and JSW Energy are listed on the country's stock exchanges. JSW Cement got the market regulator's nod for going public in January.
JSW Paints, launched in 2019, has a portfolio spanning decorative and industrial paints. The privately held JSW Group firm will acquire 74.76% in listed Akzo Nobel India Ltd from its Dutch parent Akzo Nobel N.V. and its affiliate for ₹8,986 crore, the company said in a press release.
The transaction is priced at ₹2,639.4 per share, a 17.32% discount to Thursday's closing price, according to Mint calculations.
In a post on X, JSW Paints managing director Parth Jindal, 35, said it was 'a historic day". 'Akzo Nobel India is home to some of the most globally renowned brands of paints & coatings like Dulux, International and Sikkens. We are excited to welcome them to the JSW family," he said in a statement.
'This transaction is a significant milestone in the execution of our strategy. With JSW, we are confident the business is in the hands of a long-term partner with deep local expertise and strong ambitions in the sector," said Greg Poux-Guillaume, the CEO of AkzoNobel. The Dutch paintmaker had hinted at an exit from India in October last year, when it initiated a strategic review of the business.
Apart from JSW Paints, Pidilite Industries Ltd and Indigo Paints Ltd were also in the race for acquiring Akzo Nobel India. Indigo paints, which has consolidated market share in recent years, had come close to entering the top 4 club.
Meanwhile, adhesives major Pidilite Industries, which lost the race to buy Akzo Nobel India, is also looking to start its paints journey through in-house capacity development. The company plans to target a growing demand for decorative paints in non-urban areas, Mint reported on 27 March.