New Delhi: Asian Paints’ recent investments in a lighting company and an interior decoration and furnishing firm signals a shift towards organized brands in India’s home furnishings and decor market.
On Friday—the paint company announced the acquisition of a 49% equity stake for ₹180 crore in White Teak. White Teak designs and sells decorative lighting products and fans. It also announced an investment of Rs19 crore in Weatherseal Fenestration Private Limited for a 51% stake in the company that manufactures uPVC windows and door systems.
The move will give Asian Paints some play in the largely unorganized lighting and home furnishing market. The move comes as the paints company has been moving towards becoming a full home decor solutions brand.
“Asian Paints is moving strategically from ‘share of surface’ to ‘share of space’ within homes and wants to be a part of the customer life cycle of home makeover. Windows and doors space is vital for fulfilling the home décor aspirations of homeowners and Asian Paints intends to leverage the expertise of Weatherseal Fenestration and its promoters, delivering solutions with unique value propositions to its customers," the company said in a filling to the stock exchanges while announcing the investment in Weatherseal Fenestration.
As part of the arrangement, the company has agreed to acquire additional 23.9% stake in Weatherseal Fenestration from its promoters, in a staggered manner, over the next three years. In White Teak too—Asian Paints agreed to acquire the remaining 51% stake in a phased manner, wherein 11% stake would be acquired in FY 2023-24 for a consideration based on achievement of certain financial milestones, it said.
Asian Paints has made public its plans to transform into a home décor company.
It already offers wallpapers, hard furniture and design solutions, besides its core paint products. For instance—its Beautiful Home stores offer solutions for furnishing, flooring, lighting, kitchen and bathroom.
“Asian Paints’ foray into two new segments might seem an entirely different stroke. Instead, we argue the move pushes the company towards its goal of becoming an end-to-end home décor company and allows the company to move from walls to space within home," said Abneesh Roy, executive director, Institutional Equities at Edelweiss Securities.
Roy however does not expect Asian Paints to become a leader in any of these categories.
“All of it put together though helps APL diversify revenue mix and target more of the consumer wallet. None of the paints’ peer companies has the size, ambition or capability to diversify the way Asian Paints has been doing," Roy added.
The move comes as more organized players are eyeing the home decor space offering complete solutions to customers.
Swedish furniture retailer Ikea has announced more investments in the country. In March, Britain’s Marks & Spencer and Sweden’s H&M launched home furnishings and décor collections in India, underscoring the demand in the home category.
Two years of consumers spending longer hours at home and spending some share of wallet on upgrading their homes has prompted brands to expand into the category .
