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    JSW Paints wants to grow and expand its footprint aggressively

    Synopsis

    The company is also planning to invest aggressively in new projects and acquisitions in the near term, aiming to attain a market share of 10% from the current 1.5% and become the third largest player in India over the next few years, said the son of JSW Group chairman Sajjan Jindal.

    parth jindal bcc
    Parth Jindal-led JSW Paints is expanding its footprint to northern and eastern regions to become a pan-India player and has plans to go public by 2025. The company is also setting up operations in the Middle East and Italy.

    “Last year we were only present in the South. This year we have launched in the West, and now we are launching in the North and in the East, and by Diwali, we will become a pan-India player,” managing director Jindal said.

    The company is also planning to invest aggressively in new projects and acquisitions in the near term, aiming to attain a market share of 10% from the current 1.5% and become the third largest player in India over the next few years, said the son of JSW Group chairman Sajjan Jindal.

    “We want to grow and expand aggressively … If we achieve our plans this year, then JSW Paints will become larger than Indigo Paints from a revenue standpoint. We want to become the third largest player in the country,” Jindal said.

    Asian Paints, Berger Paints and Kansai Nerolac are currently the top three players in the segment.

    JSW Paints focus currently is on expanding the brand and market share, and profitability is not an immediate priority.

    It is also not aiming to become profitable till next year, Jindal said, “…because we are using all the surplus cash flows into developing our brand and developing our retailer footprint and developing capacities.”

    The current target to turn a net profit is fiscal 2024, and the right time for an initial public offering will be closer to 2025, “when we have a significant market share”, he said.

    In fiscal 2021, the company had posted revenue of about Rs 450 crore. "This year we are targeting to close the year at around Rs 1,100 crore," he said.

    JSW Steel, while announcing its quarterly results last week, said it would be investing around Rs 750 crore in JSW Paints to acquire about 6.88% of JSW Paints’ issued equity capital.

    “This Rs 750 crore investment by JSW Steel will be sufficient for us to become a profitable company, as well as be a company that expands and grows,” Jindal told ET.

    Of the proceeds, JSW Paints will utilise Rs 300 crore in the ongoing FY22 and another Rs 250 crore in the next financial year. The balance Rs 200 crore will be utilised in FY24.

    “We are using this money to expand our industrial paint capacity from 25,000 kilolitres to 60,000 kl. The other part of the funds will be going towards increasing the decorated capacity from 90,000 kl per annum to 150,000 kl per annum,” Jindal said.

    In FY24, Rs 200 crore will be used for setting up a second decorative paint facility.

    “We have identified and we own land in both North India and East India,” Jindal said.

    The company is also setting up finishing lines in the Middle East and Italy, with an investment of not more than $3 million.

    “We're talking to those customers to get into long-term MoUs with us,” he said.

    Jindal said that the company is also focusing on increasing its retailer base from the current 2,000 to around 10,000.

    “Most of the retailers that we have added are multi-brand retailers, and some of them are even exclusive retailers of one of the leading paint companies,” Jindal said.






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    ( Originally published on Jul 27, 2021 )
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