Asian Paints share price gains after LIC raises stake in Raamdeo Agrawal's next ‘Bruised Bluechip’ target

Asian Paints share price gained over a percent on Wednesday after the state-run insurance giant Life Insurance Corporation of India (LIC) raised its stake in the company. Asian Paints shares rose as much as 1.59% to ₹2,427.80 apiece on the BSE.

LIC announced that it has increased its investment in Asian Paints to 7% through open market purchases, at an average cost of ₹2,891.25 per share this year.

“Life Insurance Corporation of India has increased its shareholding in equity shares of Asian Paints Ltd. from 4,79,66,302 to 6,72,40,527 i.e., 5.001% to 7.010% of the paid-up capital of the said Company,” LIC said in a stock exchange filing.

There is a net increase of 2.009% in holding during the period from January 1 to December 9, 2024, LIC added, noting that the acquisition was part of its investment strategy in the ordinary course of business.

Asian Paints boasts a market capitalisation of nearly ₹2.30 lakh crore and is a dominant player in the paints and coatings industry. LIC raising its stake in the company comes at a time when the paint maker navigates challenges posed by a subdued urban demand environment and rising competition amid high cost of raw materials.

Raamdeo Agrawal eyes this ‘Bruised Bluechip’

Meanwhile, veteran investor Raamdeo Agrawal is now banking on his “bruised blue chips” theory — or investing in quality, large companies when they go through a lean patch — to buy into India’s largest paintmaker.

“Nothing comes to my mind which is that bruised a blue chip besides Asian Paints," he said, referring to a near 30% year-to-date decline in the shares of Asian Paints as India’s consumption growth eased.

The chairman and cofounder of Motilal Oswal Financial Services said there is one company that market he sorely misses not investing in at the right time was Asian Paints Ltd.

“It is really iconic. I missed it three times. I am watching it from the 1980s and I have still not made a single penny out of it. But this time, I think I am going to make money,” Agrawal said.

Asian Paints Financials

Asian Paints reported weak Q2 results as its consolidated net profit plunged 42.4% year-on-year (YoY) to ₹694.64 crore during the September quarter of FY25. The company’s revenue in Q2FY25 also declined 5.3% to ₹8,003.02 crore from ₹8,451.93 crore in the same quarter last year.

Amit Syngle, Managing Director and CEO of Asian Paints highlighted that the paint industry faced a subdued demand environment during the quarter.

The company’s Domestic Decorative coatings segment volumes declined marginally, while overall domestic coatings revenue declined by 5.5% for the quarter, impacted by muted consumer sentiments and extended rains and floods in some parts of the country, he said.

Asian Paints Share Price Trend

Asian Paints share price has been falling consistently this year. The stock is down more than 4% in one month and over 28% in three months, Asian Paints shares have declined 29% year-to-date (YTD) as against Sensex’s gains of over 12%.

At 2:20 PM Asian Paints shares were trading 1.26% higher at ₹2419.80apiece on the BSE. 

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