*Is Asian Paints losing its shine?* Reliance is cashing out of Asian Paints. After holding a 4.9% stake for 17 years, it’s walking away with nearly ₹11,000 crore, a 24x return. The exit is through a block deal, meaning one large investor sells to another. So while there won’t be a crash, the 7% discount on offer could lead to some price pressure. So why dump a segment leader now? Because Asian Paints hasn’t had the best run. The stock is down 30% from last year’s peak and it’s losing market share. The reason? Pricing power is vanishing and demand is falling. Raw material costs have been a pain. Titanium Dioxide alone accounts for ~20% of inputs and its prices have been rising. Crude-derived products — solvents and additives — make up 30–35%, and crude has been volatile. Since over half of revenues go to raw materials, that hurts. Asian Paints raised prices earlier but had to cut them when input costs eased and rivals grew aggressive, leading to lower revenues. Even when crude prices cooled this year, profits didn’t rise. That’s because Asian Paints had to ramp up advertising, dealer commissions, and promotions to hold on to market share. Profits fell 45% in Q4FY25. Demand was described as “the worst in decades” and competition was squeezing every lever. Birla Opus has already grabbed 7% share within a year by offering fat dealer margins, hiring ex-Asian Paints execs, and building massive capacity. Asian Paints’ market share dropped from 59% to 52%. And Birla isn’t slowing down, it wants ₹10,000 crore in topline over 3 years. Other players are evolving too — Berger is pushing premium products, Kansai is leaning on industrial paints, and JSW may acquire Akzo Nobel India to strengthen its urban play. So, Asian Paints is fighting back, not with blind price cuts, but with a long game. It’s focusing on premiumisation and rural growth. It’s expanding into waterproofing, kitchen and bath fittings, and home décor, which now forms 5% of decorative business revenues. It’s betting on B2B demand from airports and bridges, mid-to-luxury housing, and even rural demand returning. It still has 1.7 lakh distribution points, a strong product pipeline, and deep consumer insight. Financially, it still sounds — zero debt, strong returns and brand equity. But growth has slowed, margins are under pressure and the competitive intensity is rising. That’s probably why Reliance didn’t want to wait. Because India’s paints industry isn’t a winner-takes-all game anymore. There are more players, more price cuts, and more pressure. And that might just be good news for investors and consumers. *Here's the full story–* https://finshots.in/markets/is-asian-paints-losing-its-shine/?utm_source=Summary&utm_medium=WhatsApp&utm_campaign=17-05-2025