Asian Paints Grabs Headlines as RIL Sells 3.6% Stake to SBI Mutual Fund

Shares of Asian Paints are front and centre today after a big move: Reliance Industries Ltd. (RIL) has sold a 3.6% stake in the company. What makes this interesting? It was a direct deal with SBI Mutual Fund, no middlemen, just two major players making a rare, headline-grabbing transaction. And with global crude prices jumping, investors are watching paint stocks closely.

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A Big Deal Between Two Giants

On Thursday, RIL sold around 35 million shares in Asian Paints at ₹2,201 each. That adds up to roughly ₹7,704 crore, or about $900 million. This wasn’t just any sale; it’s one of the biggest single-buyer block deals we’ve seen in India, with SBI Mutual Fund taking the entire lot.

Here’s the kicker: this move nets RIL a nearly 23x return on an investment it made 17 years ago. After the sale, RIL’s subsidiary Siddhant Commercials now holds just 1.3% of Asian Paints, down from 4.9% at the end of March.

RIL’s Strategic Exit

This isn’t a one-off move for RIL. It fits into a larger strategy to monetise non-core assets, freeing up cash for big bets or paying down debt. It’s a smart play, especially ahead of any future investments.

One market expert put it simply: this deal shows SBI MF’s buying power and RIL’s savvy asset management. The fact that the entire ₹7,704 crore deal happened before markets opened also says a lot about how well-planned this was.

SBI Mutual Fund’s Power Move

With this purchase, SBI MF, India’s biggest asset manager, has significantly increased its stake in Asian Paints. Before the deal, they held about 1.51%. Now? They’re one of the top shareholders.

It’s a bold move that signals confidence in the long-term growth of Asian Paints, even as the industry faces short-term challenges like rising input costs and stiff competition.

Crude Oil Complicates Things

There’s a twist. On the same day as the deal, Brent crude prices spiked more than 12%. Why does that matter? Paint companies rely heavily on crude-based materials. If prices stay high, costs will go up, and unless they pass that on to customers, profit margins could shrink.

An analyst put it bluntly: “Crude’s rally is squeezing paint company margins.” Still, operational efficiency and pricing power could help cushion the blow.

What’s Happening in the Market

Since the deal, Asian Paints shares have seen more action, more trading volume, and more price swings. Long-term investors seem calm, but short-term traders are jumping in to ride the volatility, especially with oil prices on the move.

While RIL selling might rattle some nerves, SBI MF’s big buy sends a strong message: this is still a stock worth backing.

Zooming Out: The Bigger Picture

Markets overall were down today, with both the Nifty50 and Sensex in the red. The FMCG and industrial sectors looked weak, though some large-cap stocks still held their ground.

Other paint players like Berger, Kansai Nerolac, and Birla Opus are also feeling the heat. Rising costs and stiff competition are putting pressure on margins, and many brokerages have already downgraded their outlooks.

Looking Ahead for Asian Paints

Despite the recent dip in profits (a 40% drop in Q2 FY25), Asian Paints remains a dominant player with a strong brand and a wide distribution network. Management is still optimistic and focused on staying resilient.

If Asian Paints can manage its costs and keep its edge, it’s still well-positioned for the long run, and SBI MF’s massive buy only strengthens that case.

Conclusion

This deal reshapes the shareholding landscape but leaves the fundamentals untouched. Asian Paints is still a market leader. Crude prices may throw some short-term challenges, but with SBI MF backing it, investor faith in the long-term story looks strong.