Ahmedabad, April 29 Plumbing pipes and building materials major Astral Limited on Friday announced acquisition of controlling stake in the operating business of Gem Paints Private Limited, marking a foray into the paints business.

On Friday, Astral Limited entered into a definitive agreement with Gem Paints to acquire 51 per cent equity stake in its operating paint business for a consideration of ₹194 crore.

The acquisition is to be made effective post demerger of the operating paint business of Gem Paints Private Limited, tentatively expected by March 31, 2023.

Gem Paints is engaged in the business of manufacturing and supply of various types of paints, varnishes, coatings, products related to home décor, industrial paints and as dealers in all types of chemicals, essences, enamels, polishes, distempers, colours etc. It has been engaged into manufacturing of high performance industrial and decorative coatings in South India.

With this acquisition, Astral looks to expand its product line.

Board control

“Pursuant to Optionally Convertible Debenture Subscription Agreement, Astral shall acquire board control of Gem Paints Private Limited by way of appointing majority directors on the board of Gems Paints Private Limited. Accordingly, Gem Paints shall become subsidiary of Astral upon completion of certain pre-closing conditions, Astral said.

“Upon completion of demerger of Operating Paint Business of Gem Paints, Astral shall acquire 51% equity stake of Resulting Company (Esha Paints Private Limited),” it added.

Incorporated in 1980, Gem Paints Private Limited has reported provisional turnover of ₹215 crore for the fiscal ended March 31, 2022, against ₹201 crore in the previous fiscal 2021.

It has over 3,000 dealers and 10 depots spread across all the States in South India. Gem Paints recently set up a plant at Nelamangala (Karnataka) with an annual capacity of 36,000 KL (post expansion of phase II — 60,000 KL).

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