Jindal family-backed Shalimar Paints scripts new coming after stagnation

Jindal family-backed paint company taken up goal of modernising plants, enhancing capacity

After decades of dullness, Shalimar Paints, the oldest paint company in India, is embarking on a journey to regain its sheen.

Upgrading plant infrastructure, expanding research and development capacities, and fortifying the supply chain are key focus areas expected to drive product improvements in the decorative and industrial segments. Plans are also on the cards to tap into international markets.

For nearly two decades, Shalimar remained stagnant, but Ashok Gupta, managing director and chief executive officer of Shalimar Paints, says, “Now, things are changing. We have taken up the goal of completely modernising the plants.”

The investment in the first phase of the plan is Rs 200 crore, which will be completed by 2024-25. Modernisation and automation will also increase the capacity, says Gupta. The capacity will increase from 6,000 kilolitres (kl) to 26,000 kl per month.

The manufacturing plants are located in Sikandrabad (Uttar Pradesh), Chennai (Tamil Nadu), and Nashik (Maharashtra). However, the Shalimar journey started from Howrah in West Bengal in 1902 when two British gentlemen A N Turner and A N Wright set up a large-scale manufacturing plant. The plant was gutted in a fire in 2014, though.

Around 1990, the company was acquired by Ratan Jindal, who holds more than 30 per cent. Hong Kong-based businessman Girish Jhunjhunwala is the other promoter with a 10 per cent holding.

Early last year, a strategic investor, Hella Infra Market, the parent of Infra.Market, announced an investment of Rs 270 crore through a combination of equity and debentures.

Infra.Market is a construction solutions company.

The company is primarily in the building materials sector, says Gupta. “They are expanding into all building materials, including paints,” he adds.

Hella Infra holds more than a 24 per cent stake in Shalimar.

The investment marked Hella Infra’s entry into the paint sector. For Shalimar, it boosted the balance sheet as it seeded newer markets.

“Today, we serve 240-250 districts; this will increase. The idea is to reach more and more into the hinterland,” says Gupta.

Shalimar’s plans to reboot the company, however, come at a time when the paint market is becoming crowded.

In recent years, JSW Group, controlled by Sajjan Jindal, brother of Ratan Jindal, entered the space; Grasim plans to set up six manufacturing plants in India by 2025. Others are also eyeing a slice of the market.

Gupta is banking on the clutter and Shalimar brand recall to make a dent in the market.

“There was a time when four dominant players (Asian Paints, Nerolac, Berger Paints, ICI paints) existed. It was difficult for another player to make its presence felt,” he adds.

“But with so many players, the market is confused, and the prominence of any single brand is reduced. That gives us an opening. And everyone knows the Shalimar brand,” he adds.