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    Aditya Birla Group’s Grasim to enter paints business with Rs 5,000 crore investment

    Synopsis

    “The foray into paints is a strategic portfolio choice for Grasim as it looks to identify new growth engines,” said Kumar Mangalam Birla, Chairman, Aditya Birla Group in a media statement on Friday.

    "The Company will be looking to invest in businesses that have the potential to be a leader in their addressable markets, have the ability to achieve scale, and generate consistent and attractive returns in the long term," Kumar Mangalam Birla, Chairman, Aditya Birla Group said.
    Mumbai: Aditya Birla Group’s flagship company, Industries to foray into the paints business with an initial capital expenditure of Rs 5,000 crore over the next 3 years. The Company believes that this sector is likely to be value accretive to its stakeholders.

    “The foray into paints is a strategic portfolio choice for Grasim as it looks to identify new growth engines,” said Kumar Mangalam Birla, Chairman, Group in a media statement on Friday.

    Birla added that the Company will be looking to invest in businesses that have the potential to be a leader in their addressable markets, have the ability to achieve scale, and generate consistent and attractive returns in the long term.

    “The paints industry presents a high-growth option for Grasim,” He said, adding that Grasim’s strong balance sheet will facilitate this entry, which will add size, scale and diversity to its existing portfolio of established standalone businesses.

    The sector has registered a revenue compound annual growth rate of around 11% during FY14 to FY19, and given the value migration from the unorganized to the organized market, the outlook remains robust, providing the space for a quality new player, the media statement said.

    “The company’s entry into this high growth sector will help painters / applicators and all traditional and emerging channel partners across India to expand their existing business and grow,” the statement said.

    The company in November of FY 21 announced divesting its fertilizer business by way of a slump sale to Indorama India Private Ltd for a cash consideration of Rs. 2,649 crore.

    “The sale is a "value unlocking" exercise for Grasim and will further enable the company to pursue growth opportunities" in its core businesses, Grasim said while announcing the divestment.

    Grasim Industries with businesses as diverse as cement, has identified its core businesses as manufacturing of viscose staple fibre and chemicals in India. The company’s subsidiaries include UltraTech Cement and , and it also has a 11.5% stake in the telecom major,

    "This move to enter the paints business will provide an impetus to the Government’s vision of ‘Atmanirbhar Bharat’ and supports the supplier ecosystem of MSMEs by helping them expand their existing raw material manufacturing capacities," the company said in a statement.
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    3 Comments on this Story

    Sagar Amula38 days ago
    Diworsification
    Nitin Gupta39 days ago
    Is he going to pay the banks on voda idea debt or not?
    Tushar 39 days ago
    first let him concentrate properly in idea first...then to think of other business..
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