The Board of Directors of Grasim has approved a foray into the paints business. Grasim’s Board has approved initial capital expenditure of ~INR 5,000 Crore over the next three years. 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 endeavours 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.”
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 believes that this sector is likely to be value accretive to its stakeholders.
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