Asian Paints Under CCI Scanner, Shares Slip After Probe Order On Unfair Practices

Key Highlights:

Asian Paints shares fell by nearly 2 percent after CCI investigation announcement.

Grasim Industries accused the company of unfair business practices.

CCI found early signs of rule-breaking and ordered a 90-day probe.

Mumbai: Shares of Asian Paints fell by almost 2 percent in morning trading on Wednesday. This happened after the Competition Commission of India (CCI) announced an investigation into the company.

On the Bombay Stock Exchange (BSE), the stock dropped by 1.78 percent to Rs 2,326.45. At the National Stock Exchange (NSE), it slipped 1.79 percent to Rs 2,327.

Grasim Industries Filed Complaint

The CCI action follows a complaint made by Grasim Industries, which is part of the Aditya Birla Group. Grasim recently entered the decorative paints market under the Birla Opus Paints brand.

Grasim accused Asian Paints of using its dominant position to stop fair competition. The complaint said Asian Paints tried to block Grasim's entry and growth in the paint market.

CCI Sees a Prima Facie Case

In its order, the CCI said there is a prima facie case against Asian Paints. This means the CCI sees enough early signs of wrongdoing to start a full investigation.

The case involves possible violations of Section 4 of the Competition Act, 2002, which stops companies from misusing market power. The CCI found that Asian Paints may have forced dealers not to work with its competitors, including Grasim.

This kind of behavior is called "exclusionary practice", and it may lead to unfair market control. The CCI said this can harm fair trade and limit consumer choices.

Investigation Ordered for 90 Days

Because of these concerns, the CCI has ordered a detailed investigation. The Director General of the CCI has 90 days to complete the probe and submit a report.

The CCI believes that Asian Paints may have put unfair conditions on its dealers by asking them not to sell paint from other companies. If true, this could be seen as exploitative conduct and against fair business rules.

Asian Paints is a leading brand in India, making both decorative and industrial paints. This new case may affect how it handles dealer relationships going forward.

(With IANS Inputs)

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