Reliance Industries Limited (RIL) has significantly trimmed its stake in Asian Paints by offloading 3.5 crore shares, raising ₹7,703.5 crore in the process. The transaction was executed at ₹2,201 per share via block deals during Thursday’s pre-market session and was routed through Siddhant Commercials Limited, a wholly owned Reliance subsidiary. Following the sale, RIL retains a residual stake of 87 lakh shares in the country’s top decorative paint manufacturer.
This deal amounts to nearly 3.64% of Asian Paints’ total equity and falls under the ambit of routine portfolio restructuring in compliance with SEBI’s Regulation 30 under its Listing Obligations and Disclosure Requirements (LODR). Market watchers see this as a calculated exit by Reliance Industries from a long-standing investment, originally made during the 2008 global financial crisis when it had invested ₹500 crore into Asian Paints. The investment has since appreciated significantly, despite recent stock underperformance.
Weak Stock Performance and Rising Competition Prompt Exit
Asian Paints has faced stiff headwinds over the last few years. Its share price has declined by 17% over the past three years, making it one of the laggards among Nifty blue-chip stocks. The company is contending with mounting competitive pressure, especially after the Aditya Birla Group’s entry into the market through Birla Opus Paints. Analysts at Elara Securities report that Asian Paints’ market share has declined from 59% to 52% in FY25.
Financial performance has also been underwhelming. The company has posted four straight quarters of muted revenue growth. Even though raw material costs have declined, margins have taken a hit due to increased rebates and price cuts introduced to counter competitors. In a recent earnings call, CEO Amit Syngle acknowledged these challenges, suggesting that Asian Paints would need to adopt “calibrated action” to maintain its market position.
The strategic divestment by Reliance Industries comes at a time when the outlook for the sector appears increasingly volatile and returns on large-cap investments are being reevaluated.
Market Impact and Cautious Institutional Sentiment
The block trade has altered the institutional shareholding landscape of Asian Paints. As of March 2025, Siddhant Commercials held a 4.9% stake, most of which has now been liquidated. Meanwhile, domestic mutual funds remain prominent shareholders, holding a collective stake of 5.67%. Notably, ICICI Prudential and SBI Mutual Fund own 1.24% and 1.51%, respectively. The Life Insurance Corporation of India (LIC) holds the largest public stake at 8.29%, while retail investors collectively own 11.84%, spread across over 11 crore small shareholders.
Following the sale, brokerages have become more cautious on Asian Paints. Nuvama Institutional Equities recently downgraded the stock, cutting earnings estimates for FY26–FY27 by 6–8%. It now projects just 7.2% compound annual EPS growth through FY28 and has reduced its target price to ₹2,200—almost identical to the price at which Reliance Industries exited. With a forward earnings valuation of 45 times, roughly 20% below the 10-year average, analysts signal a more measured outlook for Asian Paints in the coming years.
