Akzo Nobel Acquisition: JSW Group’s Listed Companies Will Have To Fund JSW Paints’ Big Move

JSW Group has announced a major acquisition deal involving Akzo Nobel India, aiming to acquire its decorative paints business, which operates under the Dulux brand. As part of the transaction, Akzo Nobel India will transfer its Paint Coating and R&D operations to its parent company before the deal closes.

JSW Paints and promoter entities will acquire a 74.7% stake in Akzo Nobel India for Rs 9,304 crore. An open offer to minority shareholders at Rs 3,417.77 per share will cost Rs 3,929.06 crore, bringing the total deal value to Rs 13,233 crore. To fund this, JSW Group will need to raise approximately $1.5 billion, with the transaction expected to close by the end of 2025.

According to Care Ratings’ April report, funding for the acquisition will be critical and closely monitored. JSW Group may need to raise both equity and debt, potentially involving its listed companies. JSW Steel, the group’s flagship, generates strong cash flows but has an aggressive capex plan— Rs 20,000 crore for FY26, up from Rs 14,000 crore in FY25.

The group’s total planned capital expenditure for FY26 stands at Rs 60,000 crore, with a quarter allocated to its EV business. Promoter entities may also consider selling stakes in listed companies to raise capital. However, JSW Group has not disclosed any direct involvement of listed entities like JSW Steel and JSW Infrastructure in the Akzo Nobel acquisition.

Promoters hold 85.6% in JSW Infrastructure and 60% in JSW Energy. A sale of 10% stake in JSW Infrastructure business could to meet the minimum public holding guideline, could ensure raise little over Rs 6000 crore. A reverse merger with JSW Paints could be a strategy to provide exit options for group companies involved in equity funding the deal. However, the exact financing structure remains unclear.

JSW Paints is 87.15% owned by the Sajjan Jindal Family Trust, with JSW Steel holding the remaining 12.85% as of December 2024. JSW Steel has invested Rs 750 crore in a phased manner in JSW Paints over the past three years.

JSW Paints had planned a capital expenditure of Rs 503 crore through FY27, including Rs 80 crore for routine expenses and Rs 158 crore for capacity expansion at Vasind, Vijayanagar, and the newly acquired Khopoli plant.

For the nine months ending December 2024, JSW Paints reported revenue of Rs 1,577.23 crore, an operating loss of Rs 32.8 crore, and a post-tax loss of Rs 82.56 crore. Its debt-to-equity ratio stood at 1.

JSW Paints operates two manufacturing facilities: Vasind (industrial paints, 60,000 KLPA) and Vijayanagar (decorative paints, 160,000 KLPA).

The Akzo Nobel acquisition is expected to boost JSW Paints’ revenue market share to nearly 10%, making it the fourth-largest paint company in India by FY25.