JSW Paints to Raise ₹3,300 Crore via NCDs for AkzoNobel India Acquisition

JSW Paints is set to raise ₹3,300 crore on Friday by issuing non-convertible debentures (NCDs). This fundraising is a key component of the JSW Group's planned ₹6,500 crore capital infusion, aimed at partially funding the acquisition of AkzoNobel India. The NCDs will have a five-year maturity with a bullet repayment at the end and a call/put option after three years, expected to be priced around 9.5%. The subscription opens on November 7 with a pay-in date of November 10. Earlier in June, JSW Paints announced its intention to acquire 74.76% of AkzoNobel India. The total consideration for the stake purchase is up to ₹9,400 crore, with the overall deal value, including an open offer for remaining shares, estimated at approximately ₹12,915 crore. Upon completion of this acquisition, the combined entity is projected to become the fourth-largest decorative paints company and the second-largest industrial paints player in India. According to an ICRA report, JSW Paints will gain access to AkzoNobel's premium brands like Dulux and its technologies in vehicle refinish and marine coatings, segments where JSW Paints currently has limited presence. AkzoNobel India will retain its powder coatings business and research and development center. JSW Paints reported revenues of ₹2,155 crore for the 2024-25 fiscal year, which are expected to increase post-acquisition. **Impact**: This strategic move will significantly consolidate the Indian paints market, strengthening JSW Paints' position against established competitors. It will provide JSW Paints with access to new product segments and premium brands, driving revenue growth and market share. The significant capital infusion indicates strong backing from the JSW Group for its paints venture. Rating: 8/10. **Difficult Terms**: Non-convertible debentures (NCDs): These are debt instruments that cannot be converted into equity shares and pay a fixed interest rate over a period. Capital infusion: The process of injecting capital (money) into a company to help it grow or fund its operations. Bullet repayment: A loan or bond repayment structure where the entire principal amount is paid back in a single lump sum at the end of the loan or bond term. Call and put option: A call option gives the issuer the right to redeem the bond early, while a put option gives the bondholder the right to sell the bond back to the issuer before maturity. Decorative paints: Paints used for aesthetic purposes on walls and surfaces in homes and buildings. Industrial paints: High-performance coatings designed for use on machinery, equipment, vehicles, and infrastructure for protection and specific functional properties. Open offer: A public offer made by a company to acquire shares of another company from its existing shareholders, typically following a takeover bid. Promoter-level equity infusion: Investment made by the founders or controlling shareholders of a company into the company itself. Vehicle refinish: Paints and coatings used for repairing and repainting vehicles. Marine coatings: Specialized paints designed to protect ships and marine structures from corrosion and harsh environments.