Reliance Industries Ltd (RIL) is planning to sell its entire 4.9 per cent stake in Asian Paints, stated a report by The Economic Times citing sources. For this purpose, it has roped in Bank of America (BofA) to manage the transaction.
RIL is looking at cashing out its 17-year old investment in the company at a time when the sector is facing margin pressure and heightened competition. This is not the first time RIL has considered selling its stake in Asian Paints. Earlier in 2020, it had entered into discussions with banks for a potential sale of its 4.9 per cent stake in Asian Paints.
Reliance had acquired this stake in the paints major in 2008 for around Rs 500 crore.
Shares of Asian Paints were down 1.62 per cent at 11:50 am today at a trading price of Rs 2,287.50.
Earlier last week, Asian Paints released its fiscal fourth quarter earnings report with net profit down 45 per cent on-year to Rs 692 crore. The paint maker reported an exceptional item of Rs 182.96 crore in its consolidated financials for Q4FY25, which includes a Rs 83.7 crore loss on the divestment of its Indonesian subsidiaries, and impairment losses of Rs 77.8 crore and Rs 21.5 crore on goodwill and intangibles related to the acquisitions of Obgenix Software (White Teak) and Causeway Paints (Sri Lanka), respectively.
The company recorded a consolidated revenue at Rs 8,359 crore. Amit Syngle, Managing Director & CEO, has said, “The weak demand conditions prevalent for the past few quarters continued to affect the paint industry even in the last quarter of the financial year.”