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Asian Paints faces antitrust heat for alleged unfair practices in market; What should investors do now?
Asian Paints Share (Representational Image)
Asian Paints Share Price: Shares of Asian Paints Ltd fell on Wednesday, July 2, after the Competition Commission of India (CCI) directed its Director General to initiate an investigation into allegations of anti-competitive practices by the company.
The probe follows a formal complaint by Grasim Industries, which recently entered the decorative paints segment under the brand Birla Opus Paints. According to the CCI’s order dated July 1, the complaint alleges that Asian Paints has been abusing its dominant position by inserting restrictive clauses in distributor agreements, discouraging them from stocking and selling Birla Paints products.
In its petition, Birla Opus also claimed that Asian Paints has been incentivizing dealers with special benefits such as exclusive discounts and sponsored foreign trips for those entering exclusive tie-ups. Meanwhile, those who also stock Birla Paints reportedly face punitive measures including reduced credit limits, increased sales targets, and fewer consumer leads.
Reacting to the development, global brokerage CLSA reiterated its ‘underperform’ rating on Asian Paints, with a target price of Rs 1,966. CLSA noted that the episode highlights the rising competition in India’s paints sector, which has low entry barriers. The brokerage also added that regulatory scrutiny is likely to intensify on how incumbent players handle market competition.
As per CMIE data, Asian Paints is the market leader in India’s paint industry, with a commanding 39.05% share in FY23. Berger Paints follows with 12.13%, while Kansai Nerolac and Akzo Nobel India hold smaller shares under 10% each.
At 9:30 a.m., shares of Asian Paints were trading at Rs 2,343.80 on the NSE, down around 1%.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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