Mumbai: Reliance Industries is planning to sell its 4.9 per cent stake in Asian Paints, as per recent media reports. The decision comes at a time when the Indian paints market is facing strong competition and falling margins. Reliance had bought this stake for Rs 500 crore in January 2008, and now, the sale could earn the company nearly Rs 11,141 crore.

The company has reportedly hired Bank of America to manage the sale process. The sale is expected to happen through block deals, either all at once or in smaller parts. Reports suggest that the stake is being offered at a 6 per cent to 7 per cent discount from the current market price.

Paint Industry Under Pressure

The Indian paints market, worth around USD 9 billion, is becoming increasingly competitive. New companies are entering the space and grabbing market share. One such new entrant, Birla Opus, has managed to secure a 3 per cent to 4 per cent share in the third quarter itself. They’ve also made good progress in building a distribution network, which is usually hard to establish.

Due to this rising competition, market leader Asian Paints has seen its market share fall from 59 per cent to 52 per cent in FY25. This is a clear sign that the company is facing pressure, and it's one of the reasons why Reliance may be looking to exit.

Final Decision Still Pending

Although the stake sale process has begun, Reliance may not go through with it if the offers are not close to their expected price. Other brokers and investment banks have also shown interest in managing or participating in the deal.

This move shows how even large, established players like Reliance are being cautious due to the changing nature of the market. It also highlights the growing impact of new companies on traditional industries like paints.