Asian Paints shares saw a slight dip today after the Competition Commission of India (CCI) ordered an investigation into the company’s alleged exclusionary practices.
Shares React to CCI Order
Shares of Asian Paints Limited were under scrutiny on Friday, July 4, following an order from the Competition Commission of India. The CCI has directed its Director General to initiate a probe against the paint giant.
The stock experienced a minor decline, falling less than 1 percent. It was trading at Rs 2426.90 apiece around 12:19 pm, after opening at Rs 2430.90.
What Are the Allegations?
In a regulatory filing on July 3, Asian Paints confirmed it is reviewing the order from the fair trade regulator. The investigation specifically targets allegations of “exclusionary practices” by the company.
Asian Paints has stated its commitment to cooperate fully with the CCI throughout the investigation process. This ensures transparency as the probe moves forward.
Company’s Next Steps
The company also mentioned that it plans to take “appropriate legal recourse” in response to the CCI’s directive. This indicates Asian Paints will explore legal options while cooperating with the ongoing inquiry.
Their quick response highlights the seriousness with which they are approaching these allegations.
A Look at Share Performance
Asian Paints is a key component of the BSE Sensex. While today saw a minor dip, the company’s shares have shown mixed performance recently.
In the short term, the stock has seen positive returns, gaining 2.78 percent over the last week and 6.12 percent over two weeks. Over the past month, shares increased by 7.81 percent, and by 2.96 percent over three months.
However, the longer-term picture reveals a decline, with shares falling 17.57 percent in the last year and 27.57 percent over two years. Despite this, the company’s shares have shown robust growth over a decade, rising 42.97 percent in five years and an impressive 214.04 percent in ten years.
Dividends and Bonus History
Asian Paints has a history of rewarding its shareholders. This year, the company paid a dividend of Rs 20.55 in June.
Last year, shareholders received dividends totaling Rs 32.40, with Rs 28.15 paid in June and Rs 4.25 in November. The company also issued a bonus to its shareholders in 2000, in a 3:5 ratio.
The Broader Paint Market Outlook
The incident with Asian Paints occurs within a growing Indian paint and coatings market. This sector is estimated to be worth USD 9.60 billion in 2024.
Projections suggest significant growth, with the market expected to reach USD 15.04 billion by 2029. This growth is anticipated at a Compound Annual Growth Rate (CAGR) of 9.38 percent between 2024 and 2029.
- Asian Paints shares dipped following a CCI investigation order.
- The CCI is probing allegations of “exclusionary practices.”
- Asian Paints plans legal action and will cooperate with the probe.
- The Indian paint market shows strong growth potential despite company-specific challenges.
Investors will be watching closely as the investigation unfolds and Asian Paints navigates this new challenge.
