Winning Bizness Desk

Mumbai. Mukesh Ambani, India’s richest businessman and chairman of Reliance Industries, has booked a massive ₹9,000 crore profit by selling his long-held stake in Asian Paints. Purchased during the 2008 global financial meltdown for ₹500 crore, this 4.9% stake delivered an astronomical return of over 2200% over 17 years. If accumulated dividends are also considered, the total profit rises to around ₹10,500 crore.

Profits locked in through fund offloading

The stake sale was carried out via Reliance’s wholly-owned subsidiary, Siddhant Commercials. On June 16, Reliance offloaded the remaining 87 lakh shares to ICICI Prudential Life Mutual Fund for ₹1,876 crore at an average price of ₹2,207.65 per share. Earlier, the company had sold 3.5 crore shares to SBI Mutual Fund for ₹7,704 crore at ₹2,201 per share.

Strategic exit amid mounting competition

Though Asian Paints remains India's largest decorative paint manufacturer, its market dominance is facing new challenges. The entry of aggressive players, especially Birla Opus Paints from the Aditya Birla Group, has started eroding its market share. According to Elara Securities, Asian Paints’ market share may decline from 59% to 52% in FY25.

Stock performance no longer impressive

Asian Paints' share price which has fallen more than 20% in the past year, turning it into one of the worst-performing blue-chip stocks. The company's stock, once known for steady and high returns, is now lagging due to increased competition and slowing growth. This may have prompted Reliance to cash out when the valuation was still attractive.

Reliance had explored exit earlier

This is not the first time Reliance considered selling its stake in Asian Paints. Nearly five years ago, the company explored divestment to reduce debt after significant investments in Jio. However, that deal did not materialize at the time.

Asian Paints: Market leader with legacy and reach

Despite market pressures, Asian Paints continues to dominate the Indian decorative paints segment. With an annual production capacity of 18.5 lakh kilolitres and a network of over 74,000 dealers, the company has retained strong operational muscle.

Global presence remains strong

Founded in 1942 by four friends as a partnership venture, Asian Paints has expanded globally over the decades. Today, it operates in 15 countries with 27 manufacturing units, and its products reach customers in more than 60 countries worldwide.

Summary pointers:

• Mukesh Ambani earned ₹9,000 crore profit from Asian Paints stake bought in 2008 for ₹500 crore.
• The stake sale was executed through Reliance's arm, Siddhant Commercials.
• Remaining shares were sold to ICICI Prudential MF for ₹1,876 crore.
• Earlier, Reliance sold a bulk of the shares to SBI Mutual Fund for ₹7,704 crore.
• Rising competition and falling stock prompted Reliance's timely exit.
• Asian Paints’ market share is projected to drop from 59% to 52% by FY25.
• Despite this, Asian Paints remains India's largest decorative paint brand with a wide global footprint.