Reasons For Over 9% Fall In Asian Paints Share Price In 2 Days
Shares of Asian Paints have nosedived today by nearly 7%. Currently, the shares of the Indian Multinational paint company are trading in negative on the NSE and priced at Rs 2,807.85 apiece with a loss of 1.06%.
Shares of Asian Paints have nosedived today by nearly 7%. Currently, the shares of the Indian Multinational paint company are trading in negative on the NSE and priced at Rs 2,807.85 apiece with a loss of 1.06%. Today only Asian Paints Shares have fallen by nearly 1 % till noon trade. Meanwhile, on the BSE the shares are trading at a price of Rs 2,815.00 apiece with a loss of 23.40. The shares have registered a fall of 0.82% on BSE.
1. Loss in two days
The closing price of Asian Paints on Tuesday was registered at Rs 3086.85. Till now the shares have registered a decline of 9 percent as the closing price was Rs 2,807.85 at NSE and Rs 2815 on the BSE till noon trade today.
2. Major Reason that triggered fall in Asian Paints Shares prices
The leading cause behind the sharp fall in the prices of share of Asian Paints both on BSE and NSE is attributed to yesterday's Grasim announcement. Grasim Industries announced yesterday that it would double capex to approximately Rs 10,000 crore to set up paints business in the coming 2-3 years. Grasim has enhanced its capital expenditure to boost its production capacity. Grasim is Aditya Birla Group's firm and forayed into the paint business in 2021.
Grasim is likely to begin production from the fourth quarter of 2023-24.
Earlier in the year 2021, Grasim board had already given nod to Rs 5000 crore capex.
As Grasim is a key part of Aditya Birla Group, it is a financially stable company. The entry of Grasim in the paint industry is likely to boost competition in the industry.
Currently, Asian Paints has nearly 50% market share in the paints market. Amid the surge in capex by Grasim, there is strong chance that the market share of Asian Paints will decline in the coming few years.
And, the news has led to the fall in the prices of Asian Shares both at the BSE and NSE.
3. Should you buy shares of Asian Paints?
Currently, the price of Asian Paints is trading much below its 52-week high of Rs 3590. The 52-week low of Asian Paints was registered at Rs 2599.35. Investors may consider to buy stocks of Asian Paints as they are trading quite low today.