Astral will acquire a 51 percent stake in Gem Paints

Recently, leading PVC pipes and plastic products manufacturer Astral informed that it will acquire a majority 51 percent stake in Gem Paints. Astral will acquire the 51% stake for a whopping Rs 194 crore. This acquisition of a majority stake in Gema paints will enable the Ahmedabad-based company to expand its product portfolio into the paints segment. The PVC pipes and plastic products manufacturer, in its regulatory filing, told that it has inked a definitive agreement with Gem Paints and its shareholders after the deal was approved by its board on Friday. The company in its statement said, "Astral shall initially invest Rs. 194 Crores in Gem Paints Private Limited by subscribing to Optionally Convertible Debentures equivalent to the value of 51 percent equity stake of Operating Paint business of Gem Paints."

Astral further informed that the remaining 49 percent equity stake will be acquired by it over a period of five years in tranches. Regarding this, Astral in a statement stated,"Upon the completion of the demerger, Astral will acquire 51 percent equity shares of Esha Paints against the redemption of OCDs. The name of Esha Paints Private Limited is proposed to be changed to Gem Paints under the demerger scheme.”