Reliance Industries Offloads 3.5 Crore Shares in Asian Paints Worth Over ₹7,700 Crore

Mumbai, June 12, 2025 — In a surprising turn of events that has sent ripples across Dalal Street, Reliance Industries Ltd (RIL) offloaded its entire 3.5 crore shareholding in Asian Paints Ltd, amounting to a mammoth ₹7,700 crore transaction. The block deal, executed via open market mechanisms, marks one of the largest single-day exits by a domestic corporate entity from a major FMCG stock in recent memory.

Deal Details and Transaction Highlights

The share sale, which was carried out during pre-market hours on Wednesday, saw Reliance divest its 3.5 crore shares, representing approximately 3.66% stake in Asian Paints. At a per-share average of ₹2,200, the cumulative transaction value hovered around ₹7,700 crore.

Market data indicates that multiple domestic institutional investors (DIIs), foreign institutional investors (FIIs), and mutual funds participated in the purchase. Names of the buyers have not been officially disclosed yet.

According to a BSE bulk deal disclosure, the transaction was routed through Reliance Strategic Investments (now known as Jio Financial Services), which previously held the stake as a legacy investment from the early 2000s.

Strategic Exit or Capital Reallocation?

Reliance Industries has been aggressively refocusing on high-growth segments such as renewable energy, telecommunications, and retail. Analysts view the exit from Asian Paints as a strategic capital reallocation exercise rather than a reflection on the fundamentals of the paint giant.

“This appears to be a long-term portfolio reshuffling move by Reliance. The company is entering capital-intensive businesses like green hydrogen and AI infrastructure. Liquidating non-core investments aligns with that agenda,” said Richa Shah, Equity Analyst at Kotak Securities.

This move also comes after Jio Financial Services' recent separation from RIL, indicating a broader clean-up of the investment book.

Market Reaction: Mixed Sentiments

Asian Paints shares opened lower by nearly 4% post the deal announcement but recovered partially through the trading session to close down 1.9% at ₹2,230. The stock has been under pressure for the past few quarters due to input cost volatility and heightened competition from Grasim’s Aditya Birla Paints.

Reliance Industries’ stock remained resilient, closing marginally higher by 0.6% at ₹2,925, as investors digested the positive implications of enhanced liquidity for future growth ventures.

“While the deal is large in size, the absence of any management exit or business-related development in Asian Paints reassures investors that the fundamentals remain intact,” said Amit Jain, Head of Research at Yes Securities.

Asian Paints: Still a Strong Contender?

Despite the stock overhang from the block deal, analysts remain constructive on Asian Paints’ long-term potential.

“Asian Paints remains the undisputed leader in decorative paints with over 50% market share. Its foray into waterproofing and home décor adds strong diversification,” noted Mehul Desai, VP at Motilal Oswal.

The company reported a 9% year-on-year revenue growth and 11% PAT growth in Q4 FY25, driven by volume recovery in urban and semi-urban centers.

Institutional Buying a Silver Lining

Industry watchers believe the block deal attracted strong institutional participation, signaling continued interest in the sector. This could support the stock price in the medium term.

“The appetite shown by long-only funds and DIIs in today’s deal reinforces the belief that this was a seller-driven trade, not a buyer-averse one,” said Harsha M, a portfolio manager with a leading mutual fund.

Investor Outlook: What Should Shareholders Do?

Retail and long-term investors are advised to stay put in Asian Paints unless the stock sees further downside due to supply overhang.

From Reliance’s perspective, the deal frees up substantial cash, which could be funneled into upcoming mega-capex projects or acquisitions in AI, clean energy, or digital infrastructure.

“Investors should not read too much into this divestment. Instead, they should track where Reliance plans to deploy the proceeds. That will offer insights into the next leg of its growth story,” emphasized Nikhil Jaisinghani, Investment Advisor.

Reliance’s exit from Asian Paints is not a signal of distress, but a calculated move in line with its evolving business strategy. On the other hand, Asian Paints, while momentarily bruised, remains fundamentally strong with solid growth levers in place.

The market will now closely watch how Reliance reallocates this capital and how Asian Paints performs amid increasing sectoral competition and investor scrutiny.