JK Cement Ltd.’s wholly-owned subsidiary JK Paints and Coatings Ltd will buy a 60% stake in Acro Paints Ltd for Rs 153 crore, the company said in an exchange filing.
The remaining 40% stake will be acquired over 12 months. The acquisition will enable JK Cement’s entry into the paints business, expand its product offering, and foray into new markets. It will bring manufacturing capabilities and product formulations, which will scale up to meet the business plan objectives for JK Paints & Coatings over the next few years, the company said.
The acquisition will also provide an opportunity to foray into the growing vertical of construction chemicals & waterproofing products.
Acro is expanding capacity to 60,000 KL for decorative and textured paints and to 6,700 KL for construction chemicals, which will be completed by Q2FY24.
Acro Paints manufactures architectural and high-performance paints and coatings in Northern India. "This acquisition is a step towards fast-tracking JK Cement's entry into the paints business, expanding its product offerings and potentially foray into new markets," the J K Cement said.
JK Paints will continue its association with Acro's promoters, Charanjeet and Ashok Gaind for the next one year, the company informed.
"Both are considered pioneers in the Indian Paint Industry. They will also continue to remain on the board of Acro Paints Ltd. and will contribute towards a shared vision. We are committed to ensuring a smooth and successful integration of our businesses and are excited to bring our combined expertise and experience to the table. The current capacity is undergoing expansion and is expected to be completed in the second quarter of FY24", Raghavpat Singhania, managing director, JK Cement said.
"We have a focused launch plan to gradually deepen our presence in our strong markets over the next few years, and have identified specific geographic, product, and channel niches where we will dominate. We will leverage the strengths of both our brands as we expand our presence in the Paint Industry. We believe Acro is synergistic with our portfolio and will help us comprehensively address the fastest-growing paint and putty segment", Madhavkrishna Singhania, deputy MD and CEO, JK Cement Said.
In some ways, J K Cements' entry into the paints market is similar to the plans of Grasim Industries Ltd, of the Aditya Birla group. The company plans to spend approximately 10,000 crores on capital expenditure by FY25, which is twice as much as the investment it originally announced in 2021.
On the National Stock Exchange share of JK Cement ended Thursday’s session 0.70% higher at Rs 3,024.20 apiece.
