Grasim Industries on Friday announced to forays into the paints business.
In a filing with the NSE, Grasim Industries said, “The Board of Directors of Grasim have approved a foray into a paints business.”
“The board has approved an investment of up to an investment of up to INR 5,000 Crore over the next 3 years, primarily towards capital expenditure,” the company said.
Speaking on the development, Kumar Mangalam Birla, Chairman, Aditya Birla Group said, “The foray into paints is a strategic portfolio choice for Grasim as it looks to identify new growth engines. 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 Company endeavors 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,” Birla added.
“The sector has registered a revenue CAGR 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 company said.
“The entry of Grasim in the paints sector will offer a wide choice to Indian consumers as the Company plans to introduce the latest range of paint products in line with global mega-trends. 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 filing added.
Adding to the filing, Grasim further said, “This move will also 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.”