Shares of Asian Paints Ltd. rose nearly 2% on Thursday, after a volatile session on Wednesday. The company's shares rebounded and ended over 2.40% higher at Rs 2,426 per share on Wednesday, even as the Competition Commission of India launched a formal investigation against the firm for allegedly abusing its dominant position in the market for manufacturing and sale of decorative paints.
CCI's move comes after a complaint by the Birla Opus Paints division of Grasim Industries Ltd., the flagship company of the Aditya Birla conglomerate, the CCI said in a release on its website.
In its 16-page order, the commission said it found prima facie evidence that Asian Paints might have violated Sections 4(2)(a)(i), 4(2)(c), and 4(2)(d) of the Competition Act, including unfair trade practices, denial of market access and imposition of supplementary obligations on dealers.
Asian Paints Share Price
Shares of Asian Paints rose as much as 1.86% to Rs 2,464.40 apiece. They pared gains to trade 1.15% higher at Rs 2,447.30 apiece, as of 9:54 a.m. This compares to a 0.31% advance in the NSE Nifty 50.
The stock has fallen 16.50% in the last 12 months and risen 7.08% year-to-date. Total traded volume so far in the day stood at 0.56 times its 30-day average. The relative strength index was at 64.08.
Out of 39 analysts tracking the company, eight maintain a 'buy' rating, 10 recommend a 'hold' and 21 suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies a downside of 5.5%.
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