Paint-maker Akzo Nobel’s India operations are being valued at a market cap of at least ₹16,000 crore, which market sources said, is “a premium and slightly higher than expectations”.

According to those in the know, “non-binding bids” for the business – apart from powder coating and R&D segments – are to be invited soon. At least four players, including Berger, JSW, Indigo and others have previously expressed interest in the business so far, but no offers have been made yet, sources told businessline.

Owners of the ‘Dulux’ brand, Akzo Nobel India is the fourth largest paint-maker in India, after Asian Paints, Berger and Kansai Nerolac. The company commands a market share of 5-7 per cent against Asian Paints and Berger which together command close to 70 per cent market share in India.

Akzo Nobel India has a presence across segments that include decorative paints, automotive and speciality coatings, industrial coatings, marine, protective and powder coatings. It has a well-knit distribution network and is said to have a better presence in the premium paints category.

The international promoter of Akzo Nobel has directed the Board to sell its powder coatings business and international R&D operations to a separate indirect subsidiary. The company has also been directed to commence evaluating and examining the acquisition offers for their promoter stake.

Citigroup Global is said to be one of the investment bankers evaluating this deal, sources said.

“Evaluation is on for the decorative, industrial and project businesses. So non-biding bids are expected by January-end or early-February, post which more details about valuation will be clear,” a person with direct knowledge said.

Akzo Nobel India did not comment on queries sent by businessline; while Berger’s MD and CEO, Abhijit Roy, did not take calls. Hemant Jalan, Chairman and MD, Indigo Paints, said: “We are still evaluating and we have not decided on a bid.”

Rich Valuation

Sources said the buzz is Akzo is currently being valued at ₹16,000 crore, which includes a premium because of its deep distribution and higher-end brand positioning. The India arm is also profitable. And the two business segments – powder coatings and R&D operations – are valued at around ₹2,000 crore-odd.

“So this valuation seems a bit high. There could be some element premium too. But nothing can be said until non-binding bids are placed and the company reveals more financial details of the deal,” one of the prospective bidders.

A non-binding bid, also known as an indicative offer, is a document that expresses interest in a deal without creating a legal obligation. It’s a tool used in sales processes to establish the terms of a deal between a buyer and a seller, and to keep negotiations moving.