JSW’s Akzo Nobel Bet: Is a New Paint Giant in the Making? Finology Research Desk Analysis

The paint industry is changing fast, with Birla Opus and JSW Paints entering this highly lucrative industry. JSW Paints recently announced the acquisition of India's fifth-largest paints company, Akzo Nobel. 

Finology Research Desk has analysed the JSW-Akzo Nobel deal this week, providing insights into the changing landscape of the paints industry. 

What makes the Paint and Coating Industry Special?

The Indian paints and coatings industry is witnessing rapid growth, driven by rising urbanisation, infrastructure development, and increasing consumer demand. Valued at USD 10.46 billion in 2025, this industry is projected to reach USD 16.37 billion by 2030, growing at a CAGR of 9.38% during this period.

 

Source: Mordor Intelligence, Finology Research Desk

The Indian paints industry is broadly divided into two segments: decorative paints and industrial coatings. Decorative paints account for 70% of total demand, primarily driven by residential and commercial construction. The remaining 30% comprises industrial coatings, catering to sectors such as automotive, oil & gas, marine, and electronics.

 

Source: Annual Report FY25, Finology Research Desk

India’s construction sector has emerged as a key growth driver for the paints industry, fuelled by FDI inflows of ~USD 26.24 billion over the last 22 years and large-scale initiatives like the Smart City Mission. Rising urbanisation, disposable income, and housing demand supported by budgetary allocations of Rs 76,549crore for urban development and Rs 80,671 crore under Prime Minister Awas Yojana have significantly boosted architectural coatings.

Industrial coatings are also witnessing rising demand with India’s manufacturing expansion, including the world’s fourth-largest rail network (67,368 km) and growth in electronics and heavy equipment. This has led to demand for durable, corrosion-resistant, and eco-compliant coatings.

Sustainability has become a key priority for paint manufacturers, leading to a shift towards water-based paints with low levels of harmful chemicals (low-VOC). Many companies are also using nanotechnology, tiny particles that work at the molecular level to make paints more durable, resistant to stains and chemicals, and easier to clean.

The Indian paints and coatings industry can also be categorised into organised and unorganised segments. The organised segment makes up about 70% of the overall market. Asian Paints dominates with around 52% share as of 2025. Berger Paints, Kansai Nerolac, Birla Opus, Akzo Nobel together with Asian Paints, account for nearly 90% of the organised market.

However, competition within this industry has intensified significantly. Grasim’s Birla Opus has entered the market with an aggressive strategy, backed by a Rs 10,000 crore investment. It is utilising UltraTech Cement’s pan-India distribution network and brand image to scale rapidly, and has already become the second-largest player in terms of installed capacity. Around the same time, JSW Paints disrupted the pricing model with its “Any Colour, One Price” strategy, triggering price wars and squeezing industry margins. These shifts have started to erode Asian Paints’ market share and are steadily redrawing the industry’s competitive landscape, marked by JSW’s recent acquisition of Akzo Nobel India.

JSW’s Acquisition of Akzo Nobel India:

JSW signed a deal to acquire a 74.76% stake in Akzo Nobel India for ~Rs 8,986 crore from Akzo Nobel N.V. and its affiliates. Of this, 50.46% will be sold by Akzo Nobel Coatings International B.V. and 24.30% by Imperial Chemical Industries Ltd. In this deal, JSW has agreed to pay up to Rs 447 crore extra post deal (contingent consideration) depending upon if certain conditions or performance targets are met.

JSW will also make an open offer to acquire the remaining 25.24% from public shareholders. The deal, subject to SEBI and Competition Commission approval, is expected to close by the end of 2025.

 

Source: Finology Ticker

When JSW Paints entered the Indian market in 2019, it was stepping into a space already ruled by big players like Asian Paints and Berger. Most saw it as a bold move. But JSW had the backing of the US$ 24 billion JSW group and a clear goal to build something significant.

Instead of chasing quick sales through discounts, the company focused on building a full range of products, covering both decorative paints and industrial coatings.. There were delays and heavy price competition. But JSW kept moving forward. In FY24, it crossed Rs 2,000 crore in revenue and earned its first Rs 67 crore operating profit in five years since inception.

Still, for Parth Jindal, the MD, just being profitable wasn’t the finish line. He wanted the company to be among the top three in the country.

To do that, JSW needed more than just a strong dealer network. It needed a strong brand power. That’s where Akzo Nobel came in.

To support this acquisition, JSW is using a mix of funding:

• Rs 3,300 crore loan from foreign banks like Sumitomo Mitsui Banking Corporation (SMBC), Barclays Bank PLC, JPMorgan Chase & Co., DBS Bank Ltd etc.
• Rs 3,000 crore from private investors in exchange for convertible shares.
• Rs 3,000 crore loan taken by pledging shares of other listed JSW companies.

But the interesting part is this, JSW wasn’t the only buyer in the race. Pidilite and Indigo Paints were also interested. Indigo, even submitted a higher offer . But JSW quickly matched it and closed the deal. That speed and commitment sent a strong message, they weren’t going to let this go.

Akzo Nobel’s global CEO later said they weren’t just looking for the highest bidder. They wanted a partner who could grow the brand in India. JSW had the local strength and the hunger to do just that. Akzo had good products and strong brand recall, but it lacked speed and focus in India. JSW brings both.

For the Akzo Nobel group, the divestment is part of a broader strategic portfolio review aimed at focusing efforts on leading positions in key global coatings markets.

Once the acquisition is complete, JSW Paints will take over Akzo Nobel India’s liquid paints and coatings business, including brands like Dulux and Sikkens and fold them into its own operations.Akzo Nobel will retain its powder coatings division and its International Research Center in India.

JSW Paints currently has a production capacity of 0.17 million metric tonnes per annum (MMTPA), placing it sixth in the Indian paints industry. Akzo Nobel, by comparison, has a larger capacity of 0.25 MMTPA. With the acquisition, JSW’s total capacity will rise to 0.42 MMTPA, making it the fourth-largest paint company in the country.

 

Source: Livemint, Finology Research Desk

Along with added capacity, JSW will also gain access to Akzo’s nationwide distribution network of over 22,000 points, including newly launched experiential stores in seven states. Since Akzo Nobel India is a listed company, the acquisition also creates the possibility of a reverse merger, where JSW Paints could eventually merge into the listed Akzo entity, allowing it to go public without going through a traditional IPO.

This immediately positions JSW Paints as the fourth-largest player in India’s decorative paints market, behind only Asian Paints, Berger and Nerolac.

This matters because the paint industry in India has long been a highly profitable sector. It consistently delivers strong returns on equity and grows at 1.5 to 1.75 times the GDP.

 

Source: Finology Research Desk

With the entry of new players like Pidilite and Grasim, and their aggressive pricing, marketing, and distribution strategies, Asian Paints, which once held 59% market share, has lost ground. It’s now down to 52%. Its Q4 FY25 profit fell 45% year-on-year. Meanwhile, Birla Opus, backed by Grasim, entered just a year ago and has already reported Rs 2,600 crore in revenue with over 50,000 dealers.

The JSW’s acquisition of Akzo Nobel India is expected to intensify competition. But JSW is staying out of the price war. Instead, it's following Berger Paints approach, focusing on premium products, higher quality, and brand trust. Berger has shown that this strategy can grow both volume and profit without cutting prices.

Business Model:

Founded in 1954, Akzo Nobel India Ltd is the Indian subsidiary of the Akzo Nobel Group, the world’s largest coatings company with a presence in over 150 countries. Akzo Nobel India Ltd. is engaged in manufacturing, trading, and selling paints and related products. It also provides research and development services to its parent and other group companies, supported by two R&D labs and five manufacturing plants across India. Its portfolio includes brands such as Dulux, International, Sikkens, and Interpon, catering to both industrial and household needs.

 

Source: Finology Research Desk

Business Verticals of Akzo Nobel India Ltd:

1. Decorative Paints 

This vertical focuses on interior and exterior wall paints under the Dulux brand. It includes emulsions, lacquers, and varnishes used in homes, offices, and commercial spaces. Along with paints, Akzo Nobel provides tinting systems, colour consultancy, and training for professionals. The aim is to enhance appearance and provide long-lasting surface protection.

2. Automotive & Specialty Coatings 

This segment serves automotive manufacturers and repair shops with high performance coatings. Its brand Sikkens offer coatings for new vehicles and refinishes for damaged ones. It also includes specialised coatings for electronics and industrial components that require durability, chemical resistance, and a smooth finish.

3. Powder Coatings 

Under the Interpon brand, Akzo Nobel makes powder coatings used in industries that need tough, long-lasting finishes. These coatings are applied as dry powder and then baked at high temperature to form a smooth, hard layer. They’re widely used on aluminium doors and windows, car parts, metal furniture, and appliances because they resist scratches, corrosion, and weather—without using harmful solvents.

4. Marine & Protective Coatings 

This business provides corrosion-resistant coatings for harsh operating environments. Under the International brand, Akzo Nobel supplies protective solutions for ships, oil rigs, wind turbines, power plants, and large infrastructure. These coatings are critical in sectors like energy, marine, and transport where asset protection and durability are key.

Revenue Mix:

 

Source: Annual Report FY25, Finology Research Desk

Akzo Nobel India reported revenue of Rs 4,091 crore in FY25, with 94% coming from domestic sales and only 6% from exports. This indicates that the company’s operations remain firmly rooted in the Indian market, with exports continuing to play a limited role.

 

Source: Annual Report FY25, Finology Research Desk

On the operational side, 97% of revenue came from the sale of products, 2% from sale of services, and the remaining 1% from other operating income. This mix has remained broadly consistent over the years, reflecting a stable, product-driven business model.

Unit economics:

 

Source: Annual Report FY25, Finology Research Desk

Cost of goods sold forms a significant part of Akzo Nobel India’s operating expenses, increased by 4.3% YoY to Rs 2,318 crore in FY24 from Rs 2,223 crore in FY23. This increase was broadly in line with revenue growth and reflects stable raw material costs, which have consistently remained around 55 - 59% of revenue over the last five years.

Finance costs saw a notable decline of 30% YoY, falling to Rs 10 crore in FY25 from Rs 13 crore in FY24. The drop was mainly driven by lower interest on loans (Rs 1.7 crore in FY25 vs Rs 2.6 crore last year) and a sharp fall in other finance charges (Rs 0.7 crore in FY25 vs Rs 2.3 crore the previous year). Over the past five years, finance costs have ranged between 0.2 - 0.5% of the total income.

Depreciation and amortisation expenses stood at Rs 89 crore in FY25 compared to Rs 82 crore in FY24, a rise of 8.5%. These costs have remained relatively stable, accounting for roughly 2 - 3% of total income in recent years.

Other expenses, which include logistics, power and fuel, advertising, and repairs & maintenance,etc., stood at Rs 795 crore in FY25, slightly up from Rs 779 crore in FY24. These costs have consistently accounted for around 18 – 20% of the total income over the years.

Tax expense declined 4% YoY to Rs 140 crore in FY25 from Rs 1,46 crore in FY26, with the effective tax rate remaining steady at around 25%. 

Net profit margin contracted marginally to 10.4% in FY25 from 10.7% in FY24. This was primarily driven by a 4.3% increase in cost of goods sold, which outpaced the 3.3% growth in revenue, slightly compressing operating profitability. Over the past five years, net profit margin has ranged between 8.7% to 10.7%.

In summary, Akzo Nobel India’s cost structure remained broadly stable in FY25. However, overall expenses rose 3.6% YoY, marginally outpacing the 3.3% growth in revenue, driven by higher raw material costs. This led to a slight decline in net profit margin from 10.7% in FY24 to 10.4% in FY25.

The Bottom Line

The Indian paint industry, once seen as stable and dominated by a few big players, is now going through major changes. New entrants like Birla Opus and JSW Paints are challenging the old leaders by growing rapidly and gaining market share. Asian Paints, the long-time market leader, is starting to feel the pressure; its profits are falling, its market share is shrinking, and concerns are surfacing about how it is dealing with dealers and distributors.

JSW’s recent move to acquire Akzo Nobel’s India business gives it a strong product portfolio and access to a well-established distribution network. At the same time, Birla Opus has delivered impressive numbers in just its first year. This shows that companies with strong financial backing and a clear plan can shake up even the most established industries. Each player is fighting hard to gain market share. With the combined strength of JSW’s scale and Akzo Nobel’s product portfolio and distribution network, JSW Paints is expected to capture a significant share in the Indian paint industry and could emerge as one of the biggest threats to existing market leaders. What do you think, which player, if any, has the right mix of scale, strategy, and speed to win this war? 

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